Law firms’ overheads are not the only point of impact for last year’s Silicon Valley-led associate pay hikes. Coupled with the downturn in the economy, the impact is being felt by US law departments, where in-housers are finding good news and bad news in the fallout.
Good news: revenge of the discounters
After years of fighting for the attention of outside lawyers, in an overheated market with ever-spiralling rates, in-house lawyers are returning to the discounting heyday.
Leading the chorus for the return to discounters are some of the biggest US players, such as Microsoft.
Many departments require 5%-10%discounts off published rates as a condition of continuing with their preferred providers. Adding salt to the wound, clients are refusing to pay for first-year associates working on their accounts. If Rip Van Winkle was a lawyer who had fallen asleep 10 years ago and awoke today, he would think the world had not changed.
