Cost Control Efforts by General Counsel Prove Unsuccessful as Legal Fees Rise in All Practice Areas Reveals 2013 Real Rate Report® Snapshot
HARTFORD, CT--(Marketwire - Jul 23, 2013) - TyMetrix, the global leader in intelligent solutions for managing the business of law, and CEB, the leading member-based advisory company, today jointly announced the release of the2013 Real Rate Report Snapshot ("2013 Snapshot") revealing that legal fees continue to rise at an average of 4.8 percent despite cost control efforts by general counsel. This is driven by average lawyer rate increases across all practice areas, with Finance and Securities lawyers billing year-over-year showing the largest rate increases in 2012 at 5.8 percent.
The 2013 Real Rate Report Snapshot ("2013 Snapshot") is the industry's leading data-driven benchmarking report for attorney rates and matter costs, and the only report that draws from actual law firm rates instead of self-reported survey responses. The 2013 Snapshot is based on more than $9.5 billion in law firm billings, an increase of nearly $2 billion from the 2012 Real Rate Report. In addition, the 2013 Snapshot encompasses 30 new U.S. cities and increased in-depth breakouts of industry areas. In total, the analysis includes billing information from 83 companies and more than 4,800 law firms, 99,000 lawyers and 26,000 paralegal timekeepers.
Trends identified in the 2013 Snapshot reveal:
- Average partner rates at small law firms (1-50 lawyers) were $342.95 in 2012, 7.6 percent larger than the 2010 average of $318.87
- More than 25 percent of partners at large New York City law firms (more than 500 lawyers) billed $1,000 or more an hour for commercial and contracts work
- Basic materials and utilities companies saw the largest difference in average partner rates in the last two years compared to other industries, paying an average partner rate in 2012 that was 17.9 percent larger than the 2010 average
"The 2013 Snapshot provides general counsel with powerful data to negotiate rates with law firms and gives them the confidence to empirically weigh the value they receive from those firms," said Brian Lee, managing director, CEB. "TyMetrix's data warehouse, combined with CEB's best-in-class analytics and tool creation, empowers legal departments to make tradeoffs between large and small firms and more carefully assess the cost-effectiveness of alternative fee arrangements, ultimately leading to better decisions when sourcing legal services."
The Snapshot draws information from TyMetrix's LegalVIEW®, the world's largest permission-based contributory data warehouse of legal performance data. LegalVIEW compiles data anonymously, and the information included in the 2013 Snapshot is presented in the same way, enabling it to be used as a benchmarking tool for corporations and law firms alike.
"As more companies realize the value of data-driven analytics, we see a rise in the number that proactively contributes key information to our LegalVIEW® data warehouse. This allows us to continue to create reports, such as this Snapshot, with increasingly more comprehensive and granular data each year, and better identify existing and emerging trends shaping the legal industry," said Craig Raeburn Jr., managing director, TyMetrix Legal Analytics. "The expert analysis provided by CEB allows us to create reports that provide actionable insights which general counsel can leverage to make better decisions."
General counsel can use the 2013 Snapshot to better control outside counsel costs by taking the following actions:
- Negotiate Better Rates - Negotiate rates with law firms using the actual rates other firms have paid, not published rack rates.
- Better Source Work to Law Firms and Alternative Providers - Understand which matters can be handled by a lower cost provider based on firm size, location or specialized service.
- Create Effective Alternative Fees - Build models for alternative fee structures based on historical costs and models for similar work.
- Enhance Budget Oversight - Set triggers to signal when spending moves beyond scope of budget to avoid costly gaffes.
- Manage Staffing - Set staffing expectations by matter and matter type using the report as a reference on how other matters are staffed.
For more information about ordering the 2013 Snapshot, please visit www.tymetrix.com or CEB Real Rate Report. To learn more about managing outside counsel, visit CEB Legal Leadership Council and TyMetrix Solutions for Corporate Legal Departments.
TyMetrix is the global market leader in delivering intelligent solutions that empower corporate legal departments, law firms and claims organizations to manage the business of law. It provides clients with quality legal management software, services and solutions, including spend and matter management, collaboration, performance metrics, and the expertise required to manage risk, reduce costs and gain the insight required to meet their strategic objectives.
TyMetrix Legal Analytics, a complementary business to TyMetrix's core software offerings, combines unparalleled analytical and legal domain expertise with LegalVIEW® -- the world's largest permission based contributory data warehouse of legal performance data -- to provide predictive and analytical models, benchmarking and insights to legal departments and all professionals involved in managing the business of law. TyMetrix is part of Wolters Kluwer Corporate Legal Services, the leader in legal process and business performance management. For more information, please visit tymetrix.com.
CEB is the leading member-based advisory company. By combining the best practices of thousands of member companies with our advanced research methodologies and human capital analytics, we equip senior leaders and their teams with insight and actionable solutions to transform operations. This distinctive approach, pioneered by CEB, enables executives to harness peer perspectives and tap into breakthrough innovation without costly consulting or reinvention. The CEB member network includes more than 16,000 executives and the majority of top companies globally.