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Another Perspective

In 2014, lawyers nationally should see more litigation, fewer full-service law firms, higher partner rates, more alternative-fee arrangements, more lateral hires, and more marketing via smartphones.

By Larry Bodine

Here’s what you can count on in 2014: a dozen full moons, a single Friday the 13th, two solar and two lunar eclipses, Mercury in retrograde three times, and no February 29. That much is certain for the legal profession. There are no guarantees for the 251 working days of 2014, but the following seems likely:

A Surge in Litigation in 2014. Research in both the Litigation Outlook 2014 by BTI Consulting and the Litigation Trends Survey Report by Fulbright & Jaworski predicts a surge in litigation in 2014. According to BTI, 61 percent of corporate clients expect to see a jump in the number of litigation matters they will handle in 2014.

Continuing Decline of the Biglaw Business Model. Over the last three years, the relative portion of legal work given to the largest, full-service law firms has declined from 26 percent of legal fees billed to only 20 percent, according to LexisNexis/Counsellink research. Fully 30 percent of legal work will go to firms with 50 or fewer lawyers. Of legal billings, 22 percent will go to “large enough” firms (200-500 lawyers).

Average U.S. Law Firm Partner Rates Are Increasing. According to the Enterprise Legal Management Trends Report, partners’ average rates increased 2.7 percent over the previous year (from a national average of $371/hour to $381), on top of a 2.5 percent increase during the previous 12-month period (from $362 to $371). The recession is over.

The partner average rate is of course an amalgam of different law firm sizes, practice areas, and locations, but it’s a reasonable indicator of how hourly rates are trending.

Expect More Alternative-Fee Arrangements. Alternative-fee arrangements (AFAs) accounted for 19 percent of firms’ revenue in 2013 – up from 16 percent in 2011, according to the Citi Hildebrand 2013 Client Advisory. It found that 16 percent of AFAs are more profitable than projects billed at an hourly rate. Another 40 percent are approximately equally as profitable as hourly projects, according to 2013 Law Firms in Transition.

Growing by Hiring Laterals is Preferred Growth Strategy, according to Citi Hildebrand. According to Altman Weil, 89 percent of law firms will pursue growth by hiring laterals. The last time there were more associates than partners at large law firms was 2008.

Smart Lawyers Will Get a Mobile Friendly Website. Gartner research reported that as of 2013, mobile phones overtook PCs as the most common Web access device. Lawyers who have websites that display well on a smartphone will generate new business and open more files. “Responsive design” is the Google-recommended method that ensures a law firm’s website adapts to any size screen. Try a 60-day free trial offered by LawLytics in Tucson, Ariz., at https://bit.ly/TrialMobile.

Additional Predictions

For the curious among you, see the following resources for additional reports about the status of the legal profession:

• National Trial Lawyers Association
• Litigation Outlook 2014
• Litigation Trends Survey Report
• LexisNexis/Counsellink research
• Enterprise Legal Management Trends Report
• Citi Hildebrand 2013 Client Advisory
• 2013 Law Firms in Transition
• 21 Expert Predictions for the Legal Industry in 2014
• Lawyers & Astrology
  
  Courtesy of Wisbar