Partners Confront 'Deeply Uncomfortable' Client Communications on Soaring Billing Rates
Law firms are increasingly relying on engagement letters or online e-billing platforms to alert clients of rate increases, even though less personalized communication can frustrate clients, sources say.
August 14, 2024 at 04:20 PM
6 minute read
The original version of this story was published on The American Lawyer
What You Need to Know
- Many Big Law firms are increasingly notifying clients of rate hikes via engagement letters or e-billing platforms, rather than personal notifications.
- Clients are increasingly staffing up their legal operations and billings departments to ensure the best rates, according to in-house experts.
- Legal industry experts say personal communication of rate increases remains the best practice.
Gone are the days when partners take clients out to lunch and give the news that their billing rates are going up, even more so than before. Now, it's increasingly common that lawyers rely on firmwide engagement letters or online e-billing platforms to alert clients of rate increases, even though less personalized communication can frustrate clients, say pricing experts and corporate counsel consultants.
One firm chair said he estimates that more than 50% of their firm's partners don't notify their clients now of rate increases, and instead rely on renewing engagement letters to do so. He noted that firms started alerting clients of regular, more automatic, across-the-board rate increases in their engagement letters about 10 years ago, causing many partners to move away from the awkward client conversations.
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