Some Lawyers are Reducing Fees as Corporations Seek Discounts
Posted Nov 4, 2008 12:57 PM CDT
By Martha Neil
When attorney Mark Peroff moved to the Manhattan office of Hiscock & Barclay, a 200-lawyer firm headquartered in upstate New York, he persuaded clients to follow him by offering a 20 percent fee discount from what they had been paying for his work at his former partnership.
Competing for corporate clients by offering lower rates is a trend that is likely to expand further as in-house counsel press for discounts in a difficult economy that increases their leverage, Bloomberg reports. The article relies on information from the Association of Corporate Counsel, among other sources.
In a memo earlier this year, Boston-based Fidelity investments told the law firms it regularly uses that the mega-brokerage expects discounts of 10 to 12.5 percent on fees, the news agency notes.
"Since we can run our business with a much lower overhead, we can allow our partners in New York to bill at a lower rate," says John Langan, Hiscock's managing partner. The firm pays "a fraction" of Manhattan rental costs for its upstate offices in Albany, Buffalo, Rochester and Syracuse, he explains. This makes it possible for Hiscock to charge less for legal work in its Manhattan office, too, because the bulk of the firm's attorney roster is upstate.
ABAJournal.com: "Corporations Spend More on In-House Lawyers, Less on Outside Firms"
ABAJournal.com: "In Brave New Post-Boom World, Corporate Clients Now Want Value"
ABAJournal.com: "Will Corporate Counsel Push Law Firms to Drop Hourly Billing?"