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Birmingham Bar Association Bulletin - Winter 2013

Client Fees Michael E. Baker, Partner, Dent Baker & Company, LLC Clients Continue to Put the Squeeze on Fees What does the ‘new normal’ mean for you? Th ough certainly diminished in strength, the economic super storm that was the Great Recession has not released its grip. And even where recovery is in evidence, businesses are holding fast to habits honed during tough times. Among these is scrupulous examination and trimming of expenses, including legal fees. As this habit becomes institutionalized I see the advent of a “new normal” in the world of legal remuneration. What’s behind the changes and how can you hold your ground in shifting sands? Th ese and other topics are detailed in part one of a two-part article on trends and tips in legal fees and billing. What’s Happening Out There? In a recent blog post, the recruiting fi rm BCG Attorney Search concurred with media reports suggesting an uptick in the “slackly performing legal jobs market.” But make no mistake. Despite encouraging glimmers, we are still in the woods and purchasers of legal services are keeping their belts tight. Ironically we are concurrently witnessing a new ceiling in legal fees, with some soughtafter dealmakers commanding more than $1,100 per hour! Th e recession precipitated changes in the legal profession that had been brewing for years. An example is the availability of online legal services such as LegalZoom that promise no hourly fees and no surprise pricing. Another is the rise of new law fi rms with nontraditional billing strategies. As businesses were forced to cut on the expense side, the legal department became fair game. I have heard from a number of attorneys whose clients called with a similar message, “I’ve got to cut back and you’ve got to help me out here.” Th e demand for maximizing the return on investment in legal services is high, with no signs of retreat. Reining It In Th e resulting fee pressure is a concern for some lawyers and a bona fi de problem for others. Findings from the annual survey of Chief Legal Offi cers (CLOs) by the consulting fi rm Altman Weil, Inc. are revealing, with “reducing and controlling costs” cited as top priorities in the past two years. 34 Birmingham Bar Association


Birmingham Bar Association Bulletin - Winter 2013
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