Corporate legal departments are getting more savvy when it comes to spending their money on legal resources. We recently saw a slide that circulated from a Paul Hastings associate where, among other not-so-pleasant items, it showed that junior associates are billing rates of $850 per hour. The days of corporate legal departments paying these rates for a junior attorney to perform low-value work are no longer a viable option.
One of the key practices for managing these concerns is to prioritize the most critical legal issues and focus on implementing technologies that can streamline addressing them most effectively. For example, eDiscovery and contract management are critical areas where technology and redistributed staffing can help to simplify workflows and reduce costs. In IPRO’s recent 2023 State of Law Firm Industry Report, 69% of survey respondents pointed out “increasing client demand for ‘more output with less costs’ as the trend they agreed with the most.”
Reducing costs is particularly challenging in the current environment, however: in Thomson Reuters’s 2022 Law Firm Business Leaders Report, 98% of managing partners and C-suite leaders said they would “probably” or “definitely” increase billing rates in 2023 to improve their financial performance. This means that $850 hourly rate will go up even higher. This is not a sustainable model for corporate legal departments that are tasked with cutting costs.