Big Law Collections Slow Down: The Morning Minute
The news and analysis you need to start your day.
June 26, 2023 at 06:00 AM
4 minute read
Law Firm Client Relationships
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WHAT WE'RE WATCHING
PAST DUE - You couldn't get away with this year in and year out with your utility providers, but the power dynamic's a little different when it comes to your outside counsel. As 2023 nears its halfway point, law firms are growing increasingly wary about clients being slow to pay their legal bills and the collections process taking longer, Law.com's Andrew Maloney reports. And they are closely monitoring the revenue and collection cycle—an indicator that directly affects firms themselves but also gives them clues about the current state of the economy and how their clients feel about its near future. According to a recent survey, the collection cycle—defined as the "moment the bill goes out the door to when the money comes in"—lengthened by 4% for all firms during the first quarter of the year. Big Law leaders and analysts told Maloney that trend has continued.
MAKE IT YOUR BUSINESS - Law firms talk all the time about the importance of understanding their clients' industries and tailoring their legal advice to those clients' business needs. Unfortunately, according to a recent Thomson Reuters survey, there's still a big difference between knowing what you have to do and actually knowing how to do it. While in-house leaders continue to rely heavily on outside law firms for their knowledge of laws and regulations, many GCs say their own teams have a better understanding of the actual business implications of legal matters, the report found. "Business savviness … is one of the strongest drivers of client satisfaction, yet is an area where many law firms are inconsistent in their delivery," according to the report, which is titled, "Who does it better? In-house teams or outside counsel?" Still, legal observers told Law.com's Trudy Knockless that it's important to remember the value that outside counsel do provide: specialized expertise and a broader perspective that is invaluable.
ON THE RADAR - Mortgage lender LoanDepot.com filed an unfair competition lawsuit against rival Movement Mortgage on Thursday in Delaware District Court. The suit, backed by Littler Mendelson and Cole Schotz, accuses Movement Mortgage of recruiting and hiring the plaintiff's employees in an unlawful effort to misappropriate trade secrets, interfere in loanDepot's business relationships, and induce former loanDepot employees to violate restrictive covenants. Counsel have not yet appeared for the defendant. The case is 1:23-cv-00681, loanDepot.com, LLC v. Movement Mortgage, LLC. Stay up on the latest state and federal litigation, as well as the latest corporate deals, with Law.com Radar.
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