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You are viewing ARCHIVED CONTENT released online between 1 April 2010 and 24 August 2018 or content that has been selectively archived and is no longer active. Content in this archive is NOT UPDATED, and links may not function.Extract from article by Gabe Friedman
The billable hour is obviously the hub of law firm economics. I don’t think that’s going to change. But the billable hour and the use of it is being carved away at by all the alternative legal service providers and the technology and the companies.
Probably the biggest trend is something that’s here and is here to stay. The discovery in large cases, e-discovery, has always been one of the largest drivers of law firm billing in big cases. Period. In almost every case, clients want that piece farmed out to contract providers who do it at a fifth of the cost of what law firms charge and that’s not going away.
The smartest firms have created their own discovery units and that will become a profit center, but far less than what the firms used to get paid. I just finished a case where the total bills were $60 million, and the document part was around $11 million. This firm had used their own attorneys at $350 to $500 hour for their associates, which is of course what rates are at big firms. But the client got wind of it, and well, it was resolved through arbitration. That bill should have been more like $4.2 million. It actually was $10.8 million. And that’s solely based on had the firm used contract personnel instead of their own people. It’s just based on hourly rates. This is the fourth level document review [one of the final stages before production].
Read the complete article at Fee Specialist On How GCs Are Tackling Their Budgets
