By - Big Law Business
One figure jumps out of a new Georgetown law school report on the legal industry: $74,100. That’s the amount per lawyer that a law firm loses annually, according to the research that found an average attorney bills 156 fewer hours than was charged just a decade ago.
Flat client demand, declining profit margins, weaker bill collection and lower market share due to alternative legal service providers are undermining firm profitability, the “2018 Report on the State of the Legal Market” concludes. Despite this underwhelming climate, rates edged up.
Firms also overestimate the strength of the demand for their services, and have not taken steps to increase efficiency that clients demand, said the report by Georgetown University Law Center’s Center for the Study of the Legal Profession and the Thomson Reuters Legal Executive Institute.
“Law firms have not been stepping up and introducing bold strategies so they are unprepared for the rapid transformations sweeping the legal industry,” James W. Jones, senior fellow at the Georgetown center and the report’s lead author, told Big Law Business.
Clients are demanding more e-discovery, document review and investigative support, according to a separate study last year, also by Georgetown Law and Thomson Reuters.
Many firms “are making only cursory investments” to offset some of the market forces, said Eric Seeger, a report co-author.
The findings mirror other studies, including the annual legal industry assessment from Altman Weil, Inc. issued in May 2017.
“There’s a culture that needs a wake-up call,” said Jones. “The levels of productivity are shocking, but these are not new issues. Many of them predated the great recession in 2007.”
The Georgetown study was based on data collected monthly from 168 firms participating in the Thomson Reuters Peer Monitor tracking system for law firm metrics. It researched specifics on a variety of metrics, including hours billed, time spent on business development, and overhead expenses. read the rest here