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Pushback on Rising Lawyer Fees

Have legal fees and associate salaries reached the tipping point where client pushback will force fees (and potentially salaries) back down? If the postings from this past week in the blogosphere are any indication, I'd say that law firms may need to make some modifications to their pricing structure if they want to keep clients happy.

This post from the WSJ Law Blog cites an April survey by legal consulting group Altman Weil that found that GCs aren't too happy about associate salary increases -- which will put more pressure on associates to bill hours to justify the  increases. According to the posts, some in-house counsel are restricting firms from using first- and second-year associates on client matters. And other firms have already insulated themselves from the fee increase by using smaller, lower-cost firms.

Next, there's this article, Ex BigLaw Associate, Now Fortune 500 GC Calls Pay Surge Ridiculous (NY Lawyer 5/23/07), which profiles John Chou, GC of Amerisource. Chou criticizes associate salaries as "ridiculous" and notes that his company has started looking for other representation because of fee increases by its existing firms.

Finally, Larry Bodine writes here that large and small firms are abandoning the billable-hour method to attract new business. And as clients grow increasingly disatisfied with increasing rates, perhaps firms will turn to alternative billing to retain existing clients.

Posted by Carolyn Elefant on May 23, 2007 at 08:07 PM | Permalink | Comments (0)

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