LexisNexis CounselLink 2019 Enterprise Legal Management Trends Report
LexisNexis CounselLink has published its 2019 Enterprise Legal Management Trends Report revealing that AFAs are up (a bit) and that the gap between average partner rates at the largest 50 US firms (750+ lawyers) and those below continues to widen. Now in its sixth year, the Trends Report is based on more $33 billion in legal spend comprised of nearly seven million invoices and approximately 1.7 million matters.
CounselLink is Lexis’ cloud-based enterprise legal management solution for corporate legal departments. It’s key findings in this year’s report include:
Use of alternative fee arrangements (AFAs) has increased over the last two years, with the percentage of matters that include a non-hourly billing component increasing from 9.2% in 2017 to 12.2%, and the percentage of dollars billed under an AFA increasing from 7.4% to 8.3%.
The gap between the average partner rates at the “largest 50” firms (those with 750+ lawyers) and those at the “second largest” firms (501-750 lawyers) continues to widen. Firms with more than 750 lawyers have billable rates that are 53% higher than rates at the next tier of firms (501-750 lawyers). This compares to a 45% gap reported in 2017, and a 40% gap in 2016.
High-rate work is dominated by the largest 50 firms. These firms were responsible for 74% of the billings generated by M&A transactions in the period, 58% of finance, loans, and investment work, 55% of corporate, general and tax work, and 52% of regulatory and compliance work. Combining these types of matters, the largest firms had a 57% share of the work in 2018 plus the first 4 months of 2019 compared to a 50% share in 2016.
The law firm consolidation trend has stabilized in the last few years. According to the new data, 61% of companies have 10 firms or fewer accounting for at least 80% of outside counsel fees, compared with 60% in 2018 and 62% in 2017.
The full CounselLink Trends report is available for download here.