The Magic Circle firm Eversheds recently gathered responses from “the top international law firms as well as 50 of the world’s most prominent businesses.” In a summary of the latter group’s views, published in Met. Corp. Counsel, Vol. 16, May 2008 at 62, the firm found that “over half (55%) believ[ed] that the current growth in law firm fees was not sustainable.”
Let’s deconstruct that quote. It is unclear whether “clients” means chief legal officers or business executives. I hope it means the former, lawyers who manage outside counsel, and believe that it does because at the start the interview refers to canvassing “the profession in its entirety.”
It is likewise unclear whether “law firm fees” refers to the total revenue of law firms or to their hourly billing rates. I hope it means the latter, because what reason could there be to think that mega-firms will cease to add lawyers.
The quote also creates uncertainty about the meaning of “current growth” in fees, since that could be the rate of increase or the absolute increase. Nor do we know if the growth measures only the past year, two years, or what period. On top of all this lack of clarity, if the situation is “not sustainable,” do they think some overall collapse in charge-out rates is imminent, or that only some law firms will be able to keep cranking up rates?
And, nail in the coffin, a respectable 45 percent apparently believe that whatever the quote describes is untrue.
I think the idea that is trying to fight clear of the uncrisp wording is that about half the inside counsel who responded don’t like the sky-high rates they pay and really hope any further rises will be moderate.