The fallout from the mega-firms' increase of annual compensation for first year associates to as much as $160,000 (!) continues to raise the eyebrows of corporate in-house counsel. Rather than continue to pay high prices for inexperienced lawyers, corporations are taking steps to keep their legal costs in line. Some examples:
- Keeping more work in-house.
- Demanding flat fees rather than hourly billing.
- Using creative, risk-sharing billing arrangements.
- Seeking authoritative answers from more expensive but experienced lawyers rather than hours of research from neophytes.
Law.com has more here.
We've preached this gospel before, but it's worth repeating. Even businesses that do not have their own legal departments can learn from the big kids.
Take some time to research law firms, meet with several, and decide which you want to establish a relationship with. Chemistry between lawyer and client counts, more than most business owners realize.
Understand that traditional hourly billing, by its nature, can encourage inefficiency. Sometimes it makes economic sense, sometimes it doesn't. But hourly billing is deeply ingrained in American business culture. All sorts of professionals use it, from attorneys to accountants to architects to engineers, and more. We're used to it, and sometimes it's hard to have the courage to break out of the mold of business as usual. The next time that you need legal services, ask prospective attorneys about their willingness to work on an alternative fee arrangement. Think about ruling out the ones who won't discuss it.
Think hard about whether a big firm with hundreds of associates (and commensurate overhead) is really what you need. New Jersey has scores, perhaps hundreds, of top-quality small and mid-sized business law firms that are staffed by lawyers who have fled the big firms for a different kind of professional life. And often for a different way to do business. Finding them is worth your time.
Learn from the in-house lawyers whose job it is to get the most bang for their company's legal services buck.