As Law Firm Rates Rise, Corporate Legal Teams Must Maintain Value For Cost
ARLINGTON, Va., June 28, 2012 /PRNewswire/ -- As top partner rates rise to more than $1,000 per hour, in-house counsel may find themselves hard pressed to control their outside counsel spending, according to the 2012 Real Rate Report, an analysis of more than $7.6 billion in law firm billings. The report was published by Corporate Executive Board (CEB) (NYSE: EXBD), a leading research and advisory services company, and TyMetrix Legal Analytics, part of Wolters Kluwer Corporate Legal Services. Insights in this report give general counsel a new resource to negotiate rates with law firms, help them understand what they're paying for and how to make smart trade-offs through options such as alternative service providers, smaller markets or smaller firms.
"Despite the recent recession, rates at top law firms continue to grow, often much faster than legal budgets at corporations," said Brian Lee, managing director, CEB. "However, the Real Rate Report shows that cost control doesn't have to be a losing battle. By using the information in this report general counsel can find out if they are paying the right rate for their legal services or if there is better value elsewhere. CEB research indicates that by simply looking at smaller markets or smaller firms, general counsel can often find high-quality advice at a much more reasonable cost than they could imagine. Essentially, they won't be paying for premier law firm office space in the most expensive cities in the country."
The Real Rate Report also reveals that while many general counsel assume that more work or longevity with a single law firm will earn them a discount, the opposite is true. While companies often reap cost savings when initially concentrating work with a few law firms or reducing the number of law firms they work with, as time passes they often pay higher rates to the law firms they work with most or have used the longest. In order to minimize what general counsel may view as the "creeping up" of law firm rates over time, companies must continue to foster competition between firms and alternative service providers and ensure rates are being examined on a regular basis.
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