Legal Commentary

More On Law Firms Raising Their Rates In Bad Economy

By Patrick J. Lamb

As I flew from Chicago to Boston this morning, I had an opportunity to read the October issue of The American Lawyer, which fortuitously arrived yesterday.  I smiled as I read a piece labled “The Going Rate: With the economy down, will fees go up?”  Readers of this blog will know I wrote about that issue a few weeks ago. I relayed a personal story about someone from a large firm telling me the firm was planning to raise rates.

AmLaw quotes Peter Haugh, managing executive of the legal group at Wachovia Corporation, as saying “Contrary to what one might think, it has become very evident that law firms are raising their rates and feeling more convinced about it.”  Feeling more convinced about it?  To quote a line my mother wore out uttering to me as a child, “good god, man, are you nuts?”

This stunning revelation comes on the heels of yesterday’s release of Association of Corporate Counsel/Serengeti Law’s study showing that in real dollar terms, corporate America is spending less on outside counsel.  I’ve regularly questioned whether lawyers have business sense, and I guess time will tell whether the strategy of throwing kerosene on the fire is the right approach to this development.  One might have thought  growing market share by actually lowering rates or looking at value fees as an option would be a better long-term strategy.  Oh well, what do I know?

So as I sit here on my flight, two pieces of advice come to mind.  For outside counsel at firms that raise rates this year, my advice is to immediately go to your phone, pick up the receiver and dial 1-8-0-0-P-S-Y-C-H-I-A-T-R-I-C-H-E-L-P and follow the instructions you receive.

For outside counsel who are shaking their heads wondering what else law firms can do to make your life difficult, my advice (at least for those who have litigation needs), is to go to your computer and type in www.valoremlaw.com.  While that last sentence is written with (hopeful) tongue in cheek, I do seriously note that firms like Valorem (my firm) and Summit Law Group and others comprised of ex-BigLaw partners who have seen the future and realize it should not include the billable hour or at least not BigLaw rates, provide a real option to help you meet your litigation needs.

Full post as published by In Search of Perfect Client Service on October 23, 2008 (boomark / email).