Posted by: johnocunningham | July 22, 2013

Current Billing Rates: Marketing Opportunity for Small Firms?

A recent Internet publication by Corporate Counsel’s Catherine Dunn reveals that lawyers who work in firms of less than 50 lawyers are billing at hourly rates less than half of what lawyers charge at the mega-firms of more than 1,000 lawyers.

Dunn’s article on “Comparing Firm Billing Rates by Practice, City and Size” is based on a North American survey of billing rates produced by TyMetrix Legal Analytics, and it shows that small firm partners are billing at an average of just $342.95 per hour compared to mega-firm partners, who are billing at an average of $727.02 per hour.

Thus, small firm partners are charging their clients just 47 percent of what mega-firm partners are charging.

Furthermore, lawyers who are partners in firms of up to 100 lawyers are charging only $380.35 on average, or just 52 percent of what mega-firm legal partners are charging.

Given the current value-conscious mindset of General Counsel and other in-house buyers of legal services, this situation presents a potential marketing opportunity for partners at smaller firms, who should be asking prospects at large companies if they are really getting twice as much bang for their hourly buck from a mega-firm lawyer.

If a smaller firm partner (even at a firm of up to 100 lawyers) has come from a mega-firm, and has the training and savvy that comes from working with large clients, then that partner is especially well-positioned to ask prospects at large corporations to give him or her a chance to show that they can produce the same legal product or service for half the price, particularly for smaller matters that do not require “bet the company” resources and reputation.

The variance in billing, according to the report, is particularly significant in high-end practice areas that command high-end pricing, such as:

  • Finance;
  • Securities; and
  • Mergers and Acquisitions.

Not every financing deal or merger requires extraordinary resources, and value-conscious legal shoppers should be aware of what smaller firms have to offer with respect to smaller deals that do not require global or maybe even national resources.

For lawyers at firms of less than 100 lawyers, this represents an opportunity, and for lawyers at larger firms, it represents a marketing challenge – how to demonstrate that the value is worth the price.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: