Here’s my first post from my notes on this week’s Legal Marketing Association – New England Conference in Boston.
Legal Spending Is Slowing
“Large companies are starting to pull back on some of the money spent on outside counsel,” said Marcie Shunk of BTI Consulting who presented research on the trends and projections for the legal services industry. While the total dollars large companies are spending on legal is increasing, the rate of spending is slowing. According to a BTI study, “outside counsel spending—which nearly doubled in the past 5 years is slowing. BTI’s projected market growth for 2008 (6.1%) will barely cover rate increases.”
Convergence Is Back
While the number of primary law firms used by large business has remained constant over the past 5 years, the number of secondary core law firms used is decreasing. A BTI projection for 2008-2010 for the Boston area is that companies will trim secondary firms used (on average) from 10 firms in 2007 to just 8.
Client Satisfaction Still Shows Room for Improvement
The silver lining in all of this is that customer satisfaction numbers still suggest that firms that can truly please the client have a real shot of gaining business. According to BTI’s Shunk, only 35 percent of clients nationally would recommend their primary law firm. (Fifty-three percent of clients in Boston would recommended their primary law firm.)
Top Satisfaction Activities
According to a chart presented by BTI graphing the 30 largest law firms’ by growth (clients increasing spending) and profitability (profits per attorney), those firms with the most success (scoring high in both categories), most often demonstrated these top satisfaction activities:
- Understand client’s business
- Client focus
- Value for the dollar
- Commitment to help
Note: When looking at the Boston market (measuring market share gains and profits per attorney), firms that made the Venn diagram’s sweet spot were:
- Ropes & Gray
- Goodwin Procter
- Choate.
BTI publishes an annual Client Service Top 30 Law Firms that includes both large and small firms. You can see the full list on their web site at: bticonsulting.com.
Top Legal Services Goals and Priorities (Boston Market)
- Achieve and maintain compliance
- Create IP strategy
- Control legal costs
- Pro-actively mitigate risk
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The latest ACC/Serengeti survey of corporations takes the same result, and makes it clear that it is safe for law firms to increase their rates by 5.3% up to 6% on hourly rates for their corporate clients. In-house corporate counsel are expecting a rate increase of 5.3% on average. See http://tinyurl.com/yq64bl for the details.