Hourly Rates Are Skyrocketing—and Driving Laterals: The Morning Minute
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May 25, 2023 at 06:00 AM
4 minute read
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WHAT WE'RE WATCHING
CHARGING UP - It wasn't just talk: hourly rates for law firm partners jumped 4.5% in 2022, driven in part by law firms' fears of profitability losses from inflation and a drop in M&A activity, according to a report from LexisNexis CounselLink. The report, based on $52 billion in legal spending across 420,000 timekeepers and 1.4 million legal matters, says that annual percentage increase was the largest since CounselLink put out its first report in 2013. The largest portion of corporate spending went to partners at the 50 largest firms. Those firms also saw their market share swell to 47.3%, particularly in regulatory and compliance, M&A and financial matters, where the 50 largest firms consumed 55% of legal billing in 2022. "There's all this increased regulatory pressure going on out there. And who do you want to handle this stuff? You're gonna go to the firms that you think had the most insight into this and that's going to be the big firms," report author Kris Satkunas, director of strategic consulting for CounselLink, told Law.com's Maria Dinzeo.
PARTNERS UNDER PRESSURE - As we've covered here before, astronomical rate hikes among big firms have not gone unnoticed by clients. But unhappy clients make for unhappy lawyers and this tension is now starting to result in lateral movement out of the First Hundred and into the Second Hundred, Law.com's Justin Henry reports. The exodus from Big Law has been apparent in practices with the most rate pressure, allowing Second Hundred firms like Ice Miller and McCarter & English along with even smaller shops like FordHarrison to recruit Am Law 100 partners in IP, labor and employment and certain areas of litigation. They're also landing the clients these partners serve. You can dig into all the Am Law 200 data here.
ON THE RADAR - Counsel at King & Spalding on Wednesday removed a breach-of-contract lawsuit against dairy product manufacturer Leprino Foods Co. to Connecticut District Court. The suit, filed by Pullman & Comley on behalf of fitness supplement company Ultimate Nutrition Inc., accuses the defendant of breaching a contract to supply the plaintiff with whey protein. The case is 3:23-cv-00677, Ultimate Nutrition Inc v. Leprino Foods Company. Stay up on the latest deals and litigation with the new Law.com Radar.
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