Law firms plan big billing rate increases, even as discounts and write-offs proliferate
Image from Shutterstock.
Planned increases in law firm billing rates have reached a 15-year high, according to Wells Fargo’s Legal Specialty Group.
Law firm leaders are planning rate increases of about 7% or 8% next year, Law.com reports, citing information from Wells Fargo’s Legal Specialty Group.
“We’re seeing higher planned rate increases at this point than we’ve ever seen, and we’ve been tracking this for 15 years,” said Owen Burman, senior consultant for the legal specialty group, in an interview with Law.com.
Inflation “is definitely a consideration,” as law firms try to make up for two years of rate increases that did not keep up with inflation, Burman told Law.com.
But law firms may be hiking standard billing rates and then offering bigger discounts as part of a strategy, said Bill Josten, strategic content manager for Thomson Reuters, in an interview with Law.com.
A second story from Law.com reports on an August survey by legal tech company BigHand, which found that law firms are offering bigger discounts and increasing their write-offs this year.
Seventy-five percent of law firms in North America reported that they increased write-offs this year, and 55% of the firms said the increase in write-offs is greater than 10%. Another 27% of North American law firms are discounting to collect payments from clients.
The survey also found that 96% of North American law firms have increased billable hours targets.