Corporate Law Firm Billing Rates Rise Despite Weak Demand

Wall Street Journal (Link to Full Article) Documents filed in chapter 11 bankruptcy cases offer a peek at the mounting hourly fees charged by elite corporate law firms.

The court filings show the rates of partners specializing in corporate restructuring, as well as those with specialties like tax, litigation and corporate law. The bottom line? Fees of $1,000 an hour don’t seem so steep anymore...

That doesn’t mean everybody’s charging four figures. A survey of in-house legal departments by BTI Consulting Group found that the average highest rate paid for law-firm partners was $875 an hour in 2015, up more than 27% from three years earlier.

Companies Pressure Law Firms With Procurement Process

Bloomberg BNA (Link to Full Article) As in-house legal departments look to cut costs and reduce inefficiencies, a process through which law firms submit competitive bids for providing legal services is becoming more mainstream...

In addition to cutting costs, the increased use of RFPs may also be a response to a growing disconnect between law firms and their clients, some observers say.

“Clients are using more RFPs because client service from law firms is down substantially,” BTI Consulting President Michael Rynowecer told Bloomberg BNA...

Apps That Fight Your Parking Tickets

Bloomberg Business (Link to Full Article) The average American spends about $232 on legal expenses each year, and many attorneys charge $175 to $550 an hour. Among other things, that means people don’t hire counsel for minor offenses—only about 5 percent of U.S. traffic tickets are contested in court...

Within five to seven years, apps stand to add about 15 percent in revenue to the slow-growing $25 billion legal-services market for consumers and small businesses, says Michael Rynowecer, president of BTI Consulting Group... 

GCs: Big Firms Getting Hired Over Competitors

Bloomberg BNA (Link to Full Article) Higher rates may not be deterring companies from selecting larger law firms when it comes to new work, according to an Aug. 12 BTI Consulting Group blog post.

As part of an ongoing annual survey of corporate counsel at companies with more than $750 million in revenue, BTI found that in the last year, 60 percent of law firm hires went to firms with 650 attorneys or more, even though these firms are billing nearly a third more per hour than their mid-sized competitors.

While IP-focused firms shed attorneys, general practice firms hold steady or beef up

Crain's Detroit Business (Link to Full Article) The traditional intellectual property boutique law firm is grappling with a slowdown in traditional patent litigation, and many firms are adjusting their size or shifting their areas of emphasis to adapt...

So why aren't the dedicated IP boutiques seeing the same growth? 

Several factors are creating challenges for those firms, said Michael Rynowecer, president and founder of Massachusetts-based BTI Consulting Group Inc., which provides research and analysis on professional service firms...

Research Shows Boom for Corporate In-House

The Law Society Gazette (Link to Full Article) General counsel are continuing to shrink their law firm panels as they bring more work in-house, according to new research on global multinational companies.

BTI Consulting Group’s 15th Annual Survey of General Counsel shows that companies have cut as many as 18 law firms from their stable of providers over the past two years.

BTI president Michael Rynowecer told the Gazette the task of managing law firms ‘is an unwieldy, and labour- and time-intensive process’...

Eric Friedman of Skadden: Inside BTI Consulting's Most Elite Legal Brand

Forbes (Link to Full Article) Skadden, Arps, Slate, Meagher & Flom tops numerous league tables and rankings, set apart from other highly regarded firms by its success across many practices, in multiple industries, and around the globe...

Today I speak with Eric Friedman, Skadden’s executive partner, to better understand how they’ve achieved their success over the years, including locking up their fourth year at the number one spot in BTI Consulting’s “Brand Elite” ranking. See our exchange below.

On Building the Best Brand

Parnell: Let’s start at the beginning and talk about the Skadden brand. This is your fourth year at the top of BTI Consulting’s “Brand Elite” ranking. Where brands are concerned, there are a lot of moving parts that go into building them. Could you talk to me about that...

Outside Counsel Reliance at 15-Year Low

Bloomberg BNA (Link to Full Article) Corporate reliance on outside counsel has dropped to a 15-year low, a new survey shows.

According to BTI Consulting Group, a large company typically relies now on 36 law firms, compared to 47 firms in 2014.

This continues a two-year trend in which companies have slashed their law firm panels, BTI said.

There are several implications for outside and in-house counsel from BTI's findings, BTI President Michael Rynowecer told Bloomberg BNA...

5 Innovative Associate Training Programs

Law360 (Link to Full Article, Sub. Req.) Faced with a new generation of associates raised in the Internet age — and with financially squeezed clients questioning every item on their legal bills — law firms are adapting their training programs by increasing interactivity, bolstering mentorship opportunities and getting young attorneys up to speed faster with MBA-style business training.

There was a time when being an associate meant a young attorney should dive in, keep his or her head down, and clock big billable hours, Michael Rynowecer, president of BTI Consulting Group Inc., told Law360. But now, he said, “some forward-thinking law firms are introducing the idea that there’s a client at the end of that work.”

“We’re spending a lot of time ... helping associates understand their clients’ businesses so they can take that burden off the shoulders of the partners,” Rynowecer said.

6 Secrets Of Highly Paid Partners

Law360 (Link to Full Article, Sub. Req.) Plump paychecks come to lawyers who embrace the grueling grind of 60-hour workweeks. But raking in the biggest bucks requires more than just toiling from dawn to dusk, experts say...

Having personal bonds is good for repeat business, and it also is likely to spark new referrals. A report last month from BTI Consulting Group found that corporate counsel have recently been plugging their favorite firms more frequently, largely in response to lawyers investing more time in client relationships and showing more of an active interest in client needs.

The 4 Firms In-House Counsel Fear The Most

Law360 (Link to Full Article, Sub. Req.) A quartet of BigLaw powerhouses that clean up in the courtroom have been identified by in-house counsel as the firms they least like to see on the other side of the table in litigation proceedings, according to a recent survey.

The group of litigation powerhouses — Jones Day, Kirkland & Ellis LLP, Quinn Emanuel Urquhart & Sullivan LLP and Skadden Arps Slate Meagher & Flom LLP — are honored as the Fearsome Foursome in the BTI Litigation Outlook 2015, compiled by BTI Consulting Group Inc. BTI surveyed more than 300 general counsel and chief legal officers at major corporations, and more than half of them named one of the Fearsome Foursome as their most feared legal opponent.

As Part of ‘Pervasive Trend,’ Companies Still Moving Legal Work In-House

Bloomberg BNA (Link to Full Article) In line with a three-year trend, large companies continue to move legal spending in-house, according to an early study of 2014-15 spending by the BTI Consulting Group.

According to a Sept. 15 BTI blog post, announcing the results of survey research conducted between March and September, “[l]arger companies, with $1 billion or more in revenue, are on track to move another $1.1 billion in legal spending in-house.” This is in addition to the $5.8 billion moved in-house in 2013.

Moreover, 58 percent of surveyed companies report a shift of resources in-house—up from 50 percent of companies in 2013—a move that shows that “in-house spending appears to be the new growth market” and that the in-house shift is a “pervasive trend rather than an idle experiment.”

Companies Curb Use of Outside Law Firms

Wall Street Journal (Link to Full Article, Sub. Req.) Law firms have some new competition these days: their own clients.

Instead of calling an outside lawyer to work on midlevel deals or contracts, many companies now handle that work in-house with growing teams of staff attorneys who don't bill by the hour.

This year corporations are shifting an estimated $1.1 billion that they used to spend on outside lawyers to their own internal legal budgets, according to a new data analysis. That migration cements a trend that took off during the recession, when general counsels were under pressure to rein in costs, and spiked in 2012, when companies redirected $5.8 billion in legal spending in-house.

About 58% of larger companies are sending more legal work to their own law departments this year, compared with 50% in 2013, according to the analysis by BTI Consulting Group Inc.

More GCs Bragging To Peers About Their Favorite Firms

Law360 (Link to Full Article, Sub. Req.) In-house leaders are feeling some renewed love for their law firms, according to recently released survey data, with a jump last year in the percentage of general counsels making personal plugs to friends and colleagues about their top legal provider.

The upswing in personal recommendations, coming after a rockier three-year period, shows a deeper emotional and financial investment in the relationship, according to BTI Consulting Group President Michael Rynowecer.

Where Will BigLaw Go Next? 5 Hottest US Legal Markets

Law360 (Link to Full Article, Sub. Req.) BigLaw is synonymous with New York, Los Angeles, Washington and Chicago, but firms that want to increase their market dominance should forget those overlawyered cities and begin to set their sights elsewhere, experts say...

Silicon Valley reigns as the nation's startup capital, but Boston, which boasts institutions like Harvard University, the Massachusetts Institute of Technology and Massachusetts General Hospital, is quickly and quietly catching up, fueled by its fertile mix of talent and resources.

“A lot of large companies in the tech sector are investing in the area and companies are moving there, in addition to the many startups that have been founded in Massachusetts,” Rynowecer said. 

And these ventures need attorneys to help with their transactional work, joint ventures, licensing, regulatory requirements and intellectual property matters, just to name a few, Rynowecer said.

Steady Work in Chicago—At Least for the Lawyers

The National Law Journal (Link to Full Article) The Chicago legal services market is keeping busy despite the city's high unemployment, thanks to a stable base of local corporations, an upswing in private-equity work and business from clients located outside the area...

The region has a large, established business base that has very specific needs, including corporate expertise and help with litigation, said Michael Rynowecer, president of The BTI Consulting Group Inc. a professional-services research and consulting firm in Wellesley, Mass. Rynowecer projects legal-services growth of between 0.5 percent and 1 percent during the next year in Chicago. "It's really the ongoing needs and ongoing activity that's keeping things going," he said.

Squire Patton Global Push Leads To Ohio Atty Departures

Law360 (Link to Full Article, Sub. Req.) The rapid global expansion of the firm formerly known as Squire Sanders LLP has come at the expense of the firm's Ohio roots and led to several high-profile lateral departures in the state since the firm's merger with Patton Boggs LLP in June, according to former Squire Sanders attorneys...

The trade-off is not unusual for a law firm like Squire Patton Boggs that wants to move past its traditional turf and challenge the world's largest firms for business in major global markets, said Michael Rynowecer, president of The BTI Consulting Group Inc.

"As law firms become more global, it's inevitable that certain partners will want to maintain a more regional or national focus," Rynowecer said. "It's not unusual in any large merger, especially one that adds global capability, to find partners that would be more comfortable in a smaller setting, even if that smaller setting is a reasonably large firm that doesn't have the same global emphasis."

Hot Boston Legal Market A Boon For Bingham Merger Hopes

Law360 (Link to Full Article, Sub. Req.) Bingham McCutchen LLP's deep roots in Boston, where many firms are enjoying a surge in transactional work through thriving tech and life science sectors, may make the floundering firm a more attractive target for potential merger partners Morgan Lewis & Bockius LLP and Winston & Strawn LLP, experts told Law360...

Michael Rynowecer of Wellesley, Massachusetts-based BTI Consulting Group said that the active state of the Boston-area legal market could be attractive to one of Bingham's merger targets. 

“Most of the Boston firms with a long history have strong connections into the venture capital firms, with the entrepreneurs, and in the startup community," he said. “Anyone who merged with Bingham, if they could successfully integrate, would get a strong New England presence, and the New England market is one that favors existing and long-term firms."

BigLaw Will Discount Deep To Keep Big Clients Happy

Law360 (Link to Full Article, Sub. Req.) A recent survey shows law firms typically charge their largest clients 13 percent less than their standard hourly rates — discounts experts say stem from pressure exerted on firms during negotiations by large companies that feel the high volume of work they’re giving the firms entitle them to lower rates.

In a joint survey of close to 1,100 private-practice lawyers and corporate counsel by Law360 and The BTI Consulting Group, corporate counsel reported receiving an average discount of 15 percent, while law firms reported handing out an average 12.7 percent discount to their largest clients. BTI president and founder Michael Rynowecer says the two percentages differ because law firms utilize different metrics to calculate their discounts.

To Make AFAs Profitable, Change the Client Relationship

Corporate Counsel (Link to Full Article) About 22 percent of law firms in a new survey said they are profiting by offering alternative fee arrangements (AFAs) to corporate clients. But that means some 78 percent haven’t figured it out yet.

“AFAs only work when your client relationships are at the absolute highest levels of trust—not just a good relationship—but a deep, embedded relationship,” says The Mad Clientist, a blog from BTI Consulting Group.