Yesterday, Texas Lawyer released the results of its annual salary and billing survey. The accompanying article quotes a couple of corporate general counsels about how BigLaw’s ever-increasing rates may affect their choice of outside lawyers. Comparing annual rate increases to “death and taxes, you know it’s coming every year,” one says that smaller boutique firms may get projects his company used to give to larger firms. Another, whose legal department handles most matters in-house, says he looks for lawyers with specific expertise when hiring outside counsel and tries “to hire the lawyer, not so much the law firm.”
Many have predicted that increasing big firm rates will drive more business to specialized solos and small firms. Common observations are that clients don’t want to pay for the extra overhead associated with large firms or to train young lawyers to whom their work might get “pushed down.” Solos and small firms are well positioned to offer the same expertise at significantly lower hourly rates or under alternative fee arrangements that big firms have been slow to implement.
Hiring large firms is considered a “safe” choice, but it is also an expensive one. Here’s hoping that more corporate counsel open their minds to hiring the lawyer rather than the law firm. They might just get better service at a better price.