Every year, most law firms increase the hourly billing rates for their attorneys. In fact, I read an article that a well-known large, international firm raises rates twice a year. Some reports indicate that associate rates have passed $1000 per hour at several law firms. Also, many major law firms are known to charge $2000 per hour or more for partners. As you can see, law firm rates continue to rise. While there is a long history of big-time clients paying these types of fees for “bet the company” litigation or for major transactions, are you facing client pushback on fees for less serious matters? Are you unable to attract new clients because your rates are too high? Are your billing rates costing you business? Is your firm uncompromising regarding your rates?
Good News
If the answer is yes to any of the above questions, there is good news. There are plenty of law firms that charge lower hourly rates and provide billing rate flexibility. Further, those firms would love to have and support you, your practice, and your clients. That’s right, they would love to have you – you do not need to stay put or start your own law firm. Plus, if your clients are pushing back hard on rates, it is just a matter of time before they find a new lawyer at another firm – a firm that is more affordable and willing to accommodate them. In addition to potentially losing clients, are your current rates impeding your ability to attract new business?
The Calculation
It may seem counterintuitive that by charging less money, you can actually make more money, but it can be very effective. For instance, lower rates may attract new business and open cross-selling opportunities. This can result in an expanded client base with a net increase in aggregate collections. With this increase, plus retaining clients who otherwise would have left, you should come out ahead. Plus, if you move to a firm that supports you and your practice, you’ll have the time and team to bring in more new business.
The Bottom Line
If you dread telling your clients about rate increases, you are not alone – or stuck. Partners with a portable book of business choose to move to a better fit firm for a multitude of reasons. And, in this market especially, we can help rainmakers find their exact right perfect-fit law firm so they can surprise their clients with great news – saving money without needing to find a new lawyer!
If you would like more information, reach out and schedule a call with us! If you would just like some answers to questions you have, please fill out our confidential Q&A form so that we can give you the answers.