Legal Commentary

Law Firms Declaring War On Clients' Wallets?

By Patrick J. Lamb

Question for clients.  How would you feel if your law firms hiked their hourly rates by 3% today.  That's right, you get the same work output and pay 3% more.  Okay, show of hands.  Ummm, any body want that 3% increase?  Is there a single hand to be raised?  Of course not.  You would think the law firm insane.

Don't assume this isn't happening to you.  Do assume you'll never know about it.  How is this happening?

Vendors pushing time capture software are showing firms studies that show that 62% of lawyers do not enter their time the same day.  For those that don't, 10% of time is lost, never entered.  Forgotten meetings.  Forgotten phone calls.  Forgotten briefs.  This software helps people remember that which they forgot, and they are promising a 3% addition to the firm's bottom line.  Without any additional work being done and, save for the software expense, no expenses.  Firms appear to be lining up. 

From my vantage point, this begs the question--where do they think this money is going to come from?  The TARP fund? The Fed printing some more money?  It will, of course, come from the firm clients, which will be paying 3% more for the same work.  I have yet to discern any way in which this differs from a 3% rate hike, except for the secrecy with which its being done.

PS.  Ask the firms how long they will be keeping this data that will help capture this "lost" time.  The answer will astound you, but I can assure you of this.  Most clients will never be able to see this data.  It will be long destroyed before you ever ask for it.

To be clear, I think this is a bad strategy for law firms--I advocated lower rates going into 2009--but even more than that, I think the stealth nature of this rate increase just plain stinks.

Full post as published by In Search of Perfect Client Service on March 19, 2009 (boomark / email).