UK Clients Rap 'Unsustainable' Plan to Raise Billable Rates
Apparent plans by many London law firms to increase the billable rates they charge corporate clients this year by an amount exceeding inflation, in order to fund pay raises for lawyers, have hit a nerve.
Clients say their attorneys are living in a dream world if they think corporations are going to be willing to up the ante much. And, before clients agree to so, they may consider moving more of their legal work in-house, says Legal Week.
“Business has to pay for [the raises] but it is not sustainable. Wages are going up and business margins are being squeezed,” says Deborah Prince, the general counsel for Which? corporation. Now that salaries for private-practice lawyers are being raised, “the only way is up” as far as billable rates for corporate clients are concerned., she continues.
“If the current trends continue, in-house legal teams will grow. Companies might just decide to directly hire the people they need,” she continues, adding “The legal profession never learns its lessons.”
As discussed in another ABAJournal.com post today, annual revenue growth was up 13.2 percent for the top 100 United Kingdom law firms during the past year.
