Morningstar Law Group co-founder Kenneth Carroll speaks of the benefits of keeping the firm's overhead low and eliminating internal competition to provide more efficient and affordable legal services to clients. "We use a model that focuses on firm revenue rather than billable hours," he says. "We believe that approach creates more of an opportunity to use fixed fees and other alternative billing arrangements than the traditional billable hour model," Carroll tells Law Practice Magazine.
Despite the challenges faced by litigation funders, the industry is optimistic on the whole, according to the latest edition of Litigation Funding. With the recent creation of the Association of Litigation Funders of England and Wales; a code of conduct set to bring transparency to third party funding; increased activity in arbitration; and forays into alternative business structures, third-party funding is said to be gaining ground - and credibility - in the quickly evolving industry.
National Law Journal' s 2012 survey of billing rates nationwide takes a look at the "continuing tug-of-war between law firms and their corporate clients over hourly billing rates," as well as a nationwide sampling of law firm billing rates, and billing rates by associate class. The survey shows that top partners at major law firms continue to charge the highest hourly prices for their services, with the highest rate ($1,285) charged by Locke Lord's Dallas office.
According to a report by Altman Weil, the number of U.S. law firm mergers and acquisitions in 2012 was the same as 2011, with 60 U.S. deals completed in both years. About three quarters of the mergers involved firms with 20 or fewer lawyers, and about 12% involved law firms with between 21 and 100 lawyers, leaving just a handful that involved large firms in cross-border transactions. A law firm consultant with the Zeughauser Group said he expected law firm deal activity in 2013 to accelerate.
Susan Hackett, CEO of Legal Executive Leadership, says that law firms should have thought twice before sending out their annual rate increase letters at the end of 2012. She calls it the profession's "bad holiday tradition." Hackett believes there are better ways to handle the issue, particularly to deliver what clients value most - predictable controlled costs, better staffing options, and measurable results that matter. To fix part of the issue, Hackett says to reconsider the time of year the letters are sent and that firms should be able to explain the reason for a rate increase beyond simple notification via letter or email. Related News: The aftermath of asking law firms not to send out price-increase letters - Legal Rebels
A Law Technology News blog asks: "Why are firms continuing to install and advance SharePoint when in reality it has never really lived up to all the hype?" Sharepoint 2013 has been released with a new interface, new cloud and SkyDrive Pro features, document versioning, upgrade paths, and tighter integration with the Office Suite and Windows 7 and 8. However, as the author of the blog points out, law firms might want to question the added value that the collaboration software brings to the table given its high cost for hardware and installation, as well as "soft costs" such as lost productivity in learning another system and user uncertainty.
A former Howrey partner is accusing Citibank of committing fraud in connection with a loan program that financed the partner's "buy in" to Howrey's partnership. Banks commonly provide loans to new firm partners, but in this particular case, Citibank was also Howrey's lender and knew of the firm's poor financial condition. According to the suit, Citibank should not have lent the plaintiffs the money to make the loan because Citibank knew that the firm was in trouble and that is where the repayments were going to come from. If this suit is successful, the traditional model for financing law firm partnerships may change.
According to two surveys of law firm leaders, big U.S. firms plan to cut partners this year as firms deal with continued stagnant or slowing demand for legal services. Having trimmed junior lawyers and staff in the years after the economic downturn, some big firms are now fixing a stern eye on partner performance. The firms are keeping close track of how much business lawyers bring in and how many hours they bill. Those with disappointing numbers can have their pay cut, be stripped of their ownership stakes, or be handed a pink slip. Related News: The death of lifetime partnership - PamWoldow.com
A survey by ALM Legal Intelligence sought to identify disconnects in the collaboration process between law firms and their corporate clients. The findings were published in a whitepaper titled " Meeting Client Expectations? The Hidden Secret for Improved Satisfaction " and found that a major component of satisfying corporate clients is being able to consistently deliver high-quality documents in the manner the client prefers. In fact, 51% said they had terminated an outside firm for sub-par performance in this area. The report identified five document and review essentials:
Deliver high-quality documents in a timelier manner
Improve the process of reusing prior work product and incorporate a number of sources
While Congress has reached a deal regarding the "fiscal cliff," uncertainties remain that could continue to encourage companies to consult with law firms, attorneys say. "You can't blame the business community for being uncertain how to invest and to plan when major patches of the economic and fiscal policy landscape remain so ambiguous," according to Dan Bryant of Covington & Burling. Deals on sequestration and the $16.4-trillion debt ceiling were notably absent, with Congress delaying the sequester for two months. Attorneys say they were busy during the normally quiet week between Dec. 25 and Jan. 1, and expect that work to continue in the coming months despite the deal.