RATE RAGE - Yesterday, we told you about how law firms are hellbent on raising rates significantly in 2023. This morning, we invite you to take a guess how in-house counsel feels about that plan. As Law.com’s Hugo Guzman, Trudy Knockless, Maria Dinzeo and Greg Andrews report, legal department heads are chafing at the idea that law firms would push ahead with aggressive rate hikes when they know legal departments are under extraordinary pressure as the economic outlook sours. “Law firms are claiming to raise rates due to inflation, but anyone who’s ever taken an economics class knows that the real reason they’re raising rates is because they think no one will notice under the guise of inflation,” said Stephanie Corey, a former legal-ops leader at HP and VMware who now leads the consulting firm UpLevel Ops. “That being said, legal departments who are budget-conscious—which are the majority, I believe—can’t shoulder this increase. Many of our clients are being asked to cut anywhere from 5-20% of their budgets, so the math just doesn’t work out.” Jason Winmill, managing partner of the legal department consulting firm Argopoint, said leading law firms are unleashing 2023 rate plans that are all over the map, ranging from no increase to hikes of 45%. “This feels more like law firms throwing spaghetti up against a wall and seeing what sticks. This is a corporate legal roller derby, and I’m predicting there’s going to be a lot of crashes, wipeouts and disabled vehicles on the other side of this,” he said.

PAY DELAY - Meanwhile, as law firms eye price hikes next year, they’re having a heck of a time collecting on this year’s bills. Law firm leaders and analysts told Law.com’s Andrew Maloney that volatility in the markets throughout 2022 has led to difficulty in pricing and polishing off deals, increasing the collections cycle across the Am Law 200 and causing firms to seek progress payments or consider selling receivables. Through the first three quarters of the year, the collections cycle lengthened by 3.7%, according to analysts at Citi’s Global Wealth at Work Law Firm Group. That’s in contrast to last year, when the collections cycle shortened by 2.1% through the first nine months of the year, as firms maintained an emphasis on billing discipline that helped them through the onset of COVID-19. This year, though, the delay has also manifested in 10.4% growth in accounts receivable and a 5.8% increase in unbilled time carried by clients, according to Citi. Gretta Rusanow, head of advisory services for the Citi group.

ON THE RADAR  - Palo Alto Networks, a multinational cybersecurity company, was hit with a patent infringement lawsuit Monday in Delaware District Court. The lawsuit, which asserts two patents related to monitoring network traffic for unusual or suspicious activity, was brought by Potter Anderson & Corroon and Proskauer Rose on behalf of BT Americas Inc. and British Telecommunications. Counsel have not yet appeared for the defendant. The case is 1:22-cv-01538, Bt Americas Inc. et al v. Palo Alto Networks Inc. Stay up on the latest deals and litigation with the new Law.com Radar


EDITOR’S PICKS

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

Global Leaders in Consulting (GLC) 2023

February 16, 2023
London

The Global Leaders in Consulting awards are for those who are making a big impression within the industry, but also worldwide.


Learn More

Complex Claims & Litigation Forum 2023

February 27, 2023 - March 01, 2023
Henderson, NV

Aimed to help Insurers prevent, prepare and prevail In adjudicating complex claims, negotiating settlements and winning cases.


Learn More

Women, Influence & Power in Law UK Awards 2023

March 08, 2023
London

Women, Influence & Power in Law UK Awards honors women lawyers who have made a remarkable difference in the legal profession.


Learn More

Attorneys-Solicitor General Division


Attorneys Solicitor General Division: The West Virginia Attorney General's Office is accepting applications for mid- and senior-level po...


Apply Now ›

Privacy, Cybersecurity & Data Governance Counsel 14814


Privacy, Cybersecurity & Data Governance Counsel 14814 Civil Service Title: Agency Attorney OJ/MBF Level: Level 3 Divisi...


Apply Now ›

Chief Privacy Officer, Office of the General Counsel 19804


Chief Privacy Officer, Office of the General Counsel 19804 Civil Service Title: Executive Agency Counsel Level: G6 Division/...


Apply Now ›

WEINSTEIN FAMILY LAW

02/06/2023
NJLJ Web

Weinstein Family Law is pleased to announce the promotion of Erika P. Handler to Partner


View Announcement ›

ANSELMI & CARVELLI, LLP

02/06/2023
NJLJ Web

Anselmi & Carvelli, LLP is pleased to announce that Zachary D. Wellbrock has been named Partner of the firm.


View Announcement ›

HENDRICK PHILLIPS SALZMAN & FLATT, PC

02/02/2023
DR Web

Hendrick Phillips Salzman & Siegel, PC is proud to announce J.T. Gallagher as the firm s newest partner.


View Announcement ›