What Your Lawyer Won’t Tell You
Something you probably won’t overhear your lawyer discussing is how the recession has dried up the market for legal services. Many lawyers, who only a year ago were working and billing at unprecedented levels, now find themselves scrambling for work. Large law firms around the globe are cutting staff and dropping their hourly rates. Law firms are cutting starting salaries and hiring fewer new lawyers. Lawyers are leaving larger firms to form smaller, more nimble, more specialized firms. By specializing and increasing efficiencies, they can actually charge lower hourly fees, while earning more money for themselves.
Big Firm Problems
The problem with many larger law firms is they become bloated, stuck with a lot of dead weight. Stellar performers often leave larger firms, taking a core group of talented associates along with them. Over time, a pool of less efficient attorneys tends to accumulate. Another problem with big law firms is that they often require their attorneys to bill a minimum number of hours every year. In a difficult economy, it becomes harder and harder to meet these mandatory annual minimums.Ask your lawyer if he or she has a minimum number of hours they are required to bill. If your lawyer responds in the affirmative, consider whether that is an incentive you want your lawyer to have, in environment where your business is one of the law firm’s steadily declining number of revenue sources.
Turning the Problem to Your Advantage
Inertia is a powerful force. If you have been with your law firm or a lawyer for a long time, it can be difficult to make a switch. In today’s economic market however, cutting legal fees can be one of the most painless ways to bolster your company’s bottom line. It simply can not hurt to shop around. Quality is obviously more important than hourly rate, but in a buyer’s market you may be able to upgrade and cut costs at the same time. Ask other professionals you know for referrals and talk with some new attorneys. Most will be happy to meet with you to explain how their blend of expertise and hourly rates can meet your needs. Worst case scenario, you may end up with information you can use to convince your current attorney to cut the hourly rates they currently charge you.