Can Rates Make Up for Expense Growth Much Longer?: The Morning Minute
The news and analysis you need to start your day.
April 20, 2023 at 06:00 AM
4 minute read
Want to get this daily news briefing by email? Here's the sign-up.
|
WHAT WE'RE WATCHING
AT THIS RATE… - Large law firms became more expensive to operate and less profitable in 2022, despite growing in terms of revenue and head count. While equity partners took home less money, associate and nonequity partner compensation continued to rise. Rate increases managed to keep gross revenue in the black as demand slid by nearly 2%. Still, the profit margin for The Am Law 100 fell 2 percentage points to 42%, wiping out the profitability gains of 2021 and putting firms below the average 2020 profit margin of 43%. "The margin on the billable dollar is contracting, and that is causing law firms to increase their rates, and that is why GCs are saying, 'Hey, maybe we bring this work in-house,'" says Aon Law Firm Advisory Team manager George Wolf. Facing seemingly unavoidable increases in personnel expenses, law firms looked to technology for efficiency and real estate for cost savings in 2022. But despite realization rates holding strong, some observers told Law.com's Dan Roe believe legal departments are at the end of their rope on rate hikes, prompting Big Law to get smart or shrink in the coming years.
OUT OF THE LOOP? - Law firms aren't doing nearly enough to keep general counsel up-to-date on legal developments that could affect their company's business, a marketing company found in a new survey of 100 GCs in the U.S. and U.K. The survey, conducted by Passle, a content marketing software company based in the U.K., found that only 8% of the 100 GCs and chief legal officers who participated believe that firms provide enough "timely, relevant content" for the market. However, they want that information, and 61% give priority to firms that keep them apprised of the latest industry developments and best practices. More than three-quarters of the GCs in the survey said they spend more than eight hours a week staying up-to-date on relevant information, and 100% said firms have a responsibility to keep their clients and prospective clients informed about news and developments. Connor Kinnear, chief marketing officer at Passle, told Law.com's Brenda Sapino Jeffreys that he found it surprising that GCs spend so much of their time reading content each week—77% spend more than eight hours on that task. "That's a full day," he said.
ON THE RADAR - Berger Singerman filed a lawsuit April 18 in Florida Circuit Court for Miami-Dade County on behalf of wine wholesaler Enovation Brands Inc. The suit pursues claims against Francesco Rando, a former accounts payable clerk at Enovation. The court case contends that Rando embezzled $2.9 million from Enovation. Counsel have not yet appeared for the defendant. The case is 2023-015402-CA-01, Enovation Brands Inc. v Rando. Stay up on the latest deals and litigation with the new Law.com Radar.
|
EDITOR'S PICKS
|
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFrom ‘Deep Sadness’ to Little Concern, Gaetz’s Nomination Draws Sharp Reaction From Lawyers
7 minute read‘What’s Up With Morgan & Morgan?’ Law, Advertising and a Calculated Rise
10 minute readConservative Boutiques That Backed Trump Reap Their Rewards
What Will Happen to the Nominees in Florida's Southern and Middle Districts?
3 minute readLaw Firms Mentioned
Trending Stories
- 1Simpson Thacher Replenishes London Ranks With Latest Linklaters Defection
- 2Holland & Knight, Akin, Crowell, Barnes and Day Pitney Add to DC Practices
- 3Squire Patton Boggs Associate Among Those Killed in String of Methanol Poisonings
- 4Womans Suit Alleging Negligence to Sex Trafficking by Hotel Tossed by Federal Judge
- 5More Big Law Firms Rush to Match Associate Bonuses, While Some Offer Potential for Even More
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250