Battered Billables: Deeper Discounts Likely, Fixed Fees on the Table
Law firms are offering smaller rate increases and greater discounts as they seek to keep clients who are demanding lower legal bills.
In the past, law firm rate increases were an annual rite, with typical boosts of 6 percent to 8 percent, according to the Fulton County Daily Report. This year the hikes will be more modest, legal consultants told the publication, but they differed on the likely percentage. And some firms aren’t raising rates at all.
Peter Zeughauser predicts an increase of 3 percent to 5 percent at most law firms. Joe Altonji of Hildebrandt International says rate hikes “are very minor, at best” and they are “more contained, not as widespread.” Tom Clay of Altman Weil, however, thinks rates will remain mostly flat.
But rate increases don’t necessarily translate into bigger bills for clients. “Discounts always have been an integral part of the game, and experts predict they will go deeper than ever, especially for a firm’s treasured clients,” the story says.
At same time, an increasing number of law firms appear ready to consider alternatives to hourly fees, if Clay’s experience is any guide. He told the Fulton County Daily Report that Altman Weil recently conducted a webinar on the topic that generated lots of interest. “Our consulting on this has skyrocketed in the last 60 days,” he said.
An in-house lawyer’s comment at a recent seminar for minority women leaders shows the pressure on fees. “When we get letters from law firms saying how much they are going to increase their fees in 2009, everybody breaks out in laughter, because that is not happening,” said Sandra Mulrain, division counsel for Georgia-Pacific.
