Aric Press writes in the Jan. 2013 American Lawyer at 134 about an analysis he did of law firm billing data from 37 substantial companies. CT TyMetrix provided the data and Aric explored various findings, such as total hours billed over a three year period and total external spending.
One finding that struck me was that $800-an-hour-and-up billings accounted for 179,768 hours during the first two quarters of 2012 out of a total of 2,796,077 hours. That means a bit more than six percent of all the hours billed to those law departments were at $13.33 a minute! As Aric put it, “For the right talent, price is not the problem.”
He also made the point that increasing shares of work flowed to Am Law 200 law firms.
The frequency of high hourly rates and the shift toward large firms go hand in hand. They support my research that shows a positive and strong correlation between the size of a law firm and its billing rates by comparable levels of lawyers.
If you’re serious about reducing your external spend, you have to make more use of smaller law firms.