Archive for the ‘Surveys’ Category

Most clients don’t want the lowest price available

October 30th, 2013 by Altman Weil

Altman Weil released its 14th annual Chief Legal Officer Survey last week, with lots of interesting data for corporate law departments as well as the law firms that serve them.  One of the most surprising survey findings involves pricing.  When asked about preferred outside counsel pricing scenarios, the over 200 Chief Legal Officers who participated in the survey overwhelmingly indicated that their preference is not for the lowest price they can get.

The survey outlined four possible law firm pricing options.  Here are client preferences:
 

  • Transparent pricing:  We want to understand how/why the price is set and have the opportunity to discuss changes - 36.4%
  • Guaranteed pricing: We want to know in advance what it will cost - 33.7%
  • Value-based pricing:  We want to pay a variable price based on the results we get - 20.3%
  • Lowest pricing: We want the lowest price available - 9.6%  
     

“If a rate discount is the only thing offered, law departments will certainly take it, but Chief Legal Officers are saying what they really want is predictability and control. So far this is a challenge that most law firms have been slow to address,” according to Altman Weil principal and survey author Dan Dilucchio.

Read it at Altman Weil

New legal industry surveys

August 8th, 2013 by Altman Weil

Here’s an update on a few noteworthy surveys that have been released this summer:

Law Firm Billing Rates

“For in-house counsel who want to do some comparison shopping on law firm billing rates, a new analysis from TyMetrix Legal Analytics and CEB shows… average hourly rate in 2012 for partners was $536.47, and for associates it was $370.25…. Partner rates went up 3.1 percent in 2012, compared to a 4 percent increase in 2011. Similarly, average associate rates increased 7.4 percent in 2012, versus 8.5 percent the year before.”

Read it at Corporate Counsel 

General Counsel Compensation:

“After across-the-board declines the previous year, compensation bounced back up in 2012 in every category of GC pay that [Corporate Counsel’s GC Compensation Survey] measures. Average total cash received rose 6.7 percent to $1,853,671, which is the highest figure we’ve seen … since 2000.”

Read it at Corporate Counsel

Law Firm Libraries:

The American Lawyer’s 12th annual Law Librarian Survey finds that, financial uptick not withstanding, the pressure to contain costs continues, clients are even more reluctant to pay for research than they were a year ago, and negotiations with vendors — never exactly a festive occasion — are still often contentious.  Overall, spending on outside vendors has held steady, with responding firms reporting an average 2013 library budget (including staff, print materials, electronic resources, etc.) of $6,194,015, compared to a 2012 average of $6,162,130. As in the past several surveys, increases in online spending were mitigated by cuts to print collections.”

Read it at The American Lawyer

New survey on legal industry trends

May 22nd, 2013 by Altman Weil

Altman Weil has released its fifth annual Law Firms in Transition Survey. Conducted in March and April 2013, the survey polled Managing Partners and Chairs at 791 US law firms with 50 or more lawyers.  Completed surveys were received from 238 firms, including 37% of the 250 largest US law firms.

Some top trend data from the survey:

  • 96% of firm leaders think more price competition and greater practice efficiency are permanent changes in the legal market
  • 90% of leaders believe there will be more commoditization of legal work
  • 80% of leaders believe there will be more non-hourly billing arrangements
  • 79% expect more competition from non-traditional legal service providers
  • 45% of firms are working on more efficient legal service delivery
  • 29% of firms have changed their strategic approach to pricing since the recession
  • 91.5% of firms raised their overall billing rates for 2013, with a median increase of 3%
  • A median of 20% to 30% of all legal fees are discounted
  • A median of 10% of fees are generated from non-hourly billing

The complete 63-page survey report includes sections on industry trends, pricing and alternative fee arrangements, economic performance, law firm growth, lawyer staffing levels, succession planning, and the future of the profession.

It is available to download at: www.altmanweil.com/LFiT2013.

AmLaw 100 2013

May 3rd, 2013 by Altman Weil

The American Lawyer released its review of BigLaw economic performance for 2012 and the numbers are up, if modestly:

  • Revenue: up 3.4%
  • RPL: up 2.6%
  • PPP: up 4.2%

The magazine’s take on this:

“Revenue per lawyer is up not because firms added head count—that metric only nudged up 0.8 percent—but primarily as a result of positive economic indicators. Firms were able to raise rates, and their lawyers, as a rule, were able to bill more hours (although this varied widely by practice area). Profits followed a similar path. Net income edged up 4.2 percent, and profits per partner rose even as equity partner head count stayed flat. This suggests that firms posted real profit gains, as opposed to (ahem) adjusting their partner head count.”

Read it at The American Lawyer

2012 billing rates

December 18th, 2012 by Altman Weil

The National Law Journal has published its annual Law Firm Billing Survey which includes partner and associate billing rates for the NLJ350 list (law firms with about 120 lawyers or more).  Some survey findings:

  • Median 2012 billing rate: $432/hour
  • Median partner rate: $517/hour (up 4.5%)
  • Median associate rate: $323/hour  (up 3.5%)

However the rate asked and the rate received are often two different things.  Altman Weil consultant Ward Bower was quoted in the article:

“Driving the uptick is what consultant Ward Bower calls a “car dealership sticker price” phenomenon. Law firms are upping their asking price to gain room to haggle. The wider margin gives clients the feeling they’re getting a better deal.”

“Law firms are negotiating downward,” said Bower, of Altman Weil. “Many of them aren’t charging the quoted rates with these kinds of increases.”

Read it at National Law Journal

General Counsel Compensation

December 14th, 2012 by Altman Weil

The Association of Corporate Counsel is out with a new Law Department Comensation Survey.  They break the data into three segments for large, medium and small departments, according to a story in Corporate Counsel magazine today.

In large law departments:

  • GC base pay was $567,924 in 2012
  • Annual cash bonuses were an average $543,109  

GC comp in mid-sized departments:

  • $347,662 average salary
  • $210,900 average cash bonus

Read it at Corporate Counsel

Chief Legal Officers are pushing for change

November 5th, 2012 by Altman Weil

Corporate law departments report that they are re-negotiating outside counsel fees, shifting work to lower-priced law firms, increasing in-house capacity, opting for alternative service providers and using new technology — all to develop a more cost-effective legal services model — according to over 200 General Counsel who participated in the Altman Weil 2012 Chief Legal Officer Survey.

“Chief Legal Officers are not waiting for law firms to change their business models,” said Altman Weil principal Daniel J. DiLucchio.  “They are taking change into their own hands in 2012 to create a new internal value proposition.”

Read it at Altman Weil

New associate comp survey

September 20th, 2012 by Altman Weil

NALP’s new research on associate compensation is a timely complement to yesterday’s BigLaw partner compensation survey news.  They found that fewer new hires are collecting top dollar ($160K) salaries right out of law school.

“Recent research from NALP reveals that, although first-year associate salaries of $160,000 are still widespread at large law firms of more than 700 lawyers — especially in large markets — that figure no longer represents the prevailing salary, resulting in a median for this group of firms as a whole of $145,000, a median figure last seen in 2007. In the intervening years at least half the first-year salaries in firms of this size were reported at $160,000, with the proportion reaching a high of nearly two-thirds in 2009, confirming the characterization of 2009 as the recent high point for large firm salaries. “

But overall first year salaries are up somewhat…

“NALP’s 2012 Associate Salary Survey reports that the overall median first-year salary at firms of all sizes was $125,000, up from $115,000 in 2011. Medians ranged from $70,750 in firms of 2-25 lawyers to $125,000 in firms of 501-700 lawyers, and $145,000 in firms of 251-500 lawyers and in firms of more than 700 lawyers. The median at firms of 251-500 lawyers had been at $125,000 from 2009 to 2011, while that at firms of 501-700 lawyers edged up from $120,000, reflecting relatively more reporting of salaries of $125,000 in 2012 compared with 2011.”

The NALP survey included data from 570 law firms of all sizes.

Read it at NALP

New survey on partner comp in large law firms

September 19th, 2012 by Altman Weil

There’s a new survey out on partner compensation in large law firms.  Major, Lindsey & Africa and ALM Legal Intelligence, surveyed partners at Am Law 200, NLJ 350, and Global 100 firms in 2012 and received 2,228 responses.

“[Partners] saw their annual compensation rise, on average, 6.4 percent to $681,000 over the past two years. The jump was apparently driven, at least in part, by an uptick in the average rate those partners are billing, from $555 per hour in 2010 to $585 today.

The survey… shows that not all partners have benefited equally from the increase. On average, equity partners are better compensated than their non-equity counterparts, male partners make more than their female colleagues, corporate partners earn more than litigators, and partners in open compensation systems are paid better than those in closed compensation systems.

The disparity in pay among partner classes is one of the survey’s most compelling findings. Equity partners, who accounted for 62 percent of respondents, have seen their compensation increase a robust 11 percent, from $811,000 in 2010 to $896,000 this year. Conversely, the average compensation for nonequity partners stayed flat, going from $336,000 in 2010 to $335,000 this year.”

Read it at The AmLaw Daily

Responding to RFPs

September 4th, 2012 by Altman Weil

LexisNexis released a new survey last month on RFP activity in law firms.  Considering the importance of winning new business in the current market, a surprising 41% of the 359 law firms responding to the survey reported that they don’t track the number of RFPs they receive or the time they spend responding.   Of the 200+ firms that did quantify RFP activity, the survey found:

  • The number of RFPs firms respond to varies proportionally with firm size.  Firms with 50 or fewer lawyers respond to an average of 5 RFPs each month, while firms with over 500 lawyers respond to 16 per month on average.
  • Firms spend between 20 and 25 hours on each RFP response, which works out to a minimum of 1,000 hours each year up to 4,800 hours a year.
  • 84% of firms responding said the number of proposals they send is the same or increasing compared to a year ago.
  • Despite the considerable resources expended on the RFP process, only 58% of firms report that they track RFP success rates.

Read it at LexisNexis