Posted Sep 28, 2009 01:52 pm CDT
The general counsel for Citigroup says his in-house legal department has been battered by the economic downturn, leaving him with little sympathy for law firm arguments for premium fees.
General counsel Michael Helfer, a panelist at an event sponsored by Bisnow, said Citigroup’s in-house legal department has shrunk by about 300 employees over the last few years, many of them felled by layoffs, according to the Washingtonian’s Capital Comment Blog. Compensation for the lawyers who are left has been cut by up to 60 percent.
In such an environment, “The amount of sympathy I have for the argument that $1,000 an hour is a reasonable rate … is nil,” Helfer said, according to the blog account.
Law firms aiming to please general counsel such as Helfer are agreeing to charge alternative fees. Panelists told of changes. The percentage of revenue from alternative billing is about 10 percent at Arent Fox, about 15 percent to 20 percent at Akin Gump Strauss Hauer & Feld, and about 5 percent to 10 percent at Skadden, Arps, Slate, Meagher & Flom.
Even as law firms move to alternative fees, they hope to maintain partner profits that can average more than $1 million a partner. Akin Gump chairman Bruce McLean acknowledged it won’t be easy, the blog says. “It’s a big challenge,” said McLean. “We’re not so good at that yet.”
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