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Research: embedded ties between law firms and departments lower rates yet can increase firm profits

“Firms in which two thirds of their large corporate clients are in a long-term relations on average charge $4.07 less per hour for partners and $1.60 less per hour for associates than firms in which only one-third of their large corporate clients are in the long-term relations.” Laura Empson, ed., Managing the Modern Law Firm: New Challenges New Perspectives (Oxford Univ. Press 2007) at 105.

However, the chapter goes on to state that the firms more than make up for the lower rates with higher volume and lower transaction (marketing costs). The authors were careful to rule out other possible explanations of this seeming paradox. It all sounds like the proverbial win-win.