Originally posted on Cameron's Profits for Partners Blog:
Originally posted on Small Firm Innovation
Large law firms today are in a real bind. Their large clients are looking for lower legal costs, but large firms have big overheads, lots of partners to feed, and little experience in providing alternative billing solutions. They have increased their chargeout rates significantly in the last decade, and large clients are understandably upset. The rise of the Association of Corporate Counsel (ACC) is an indicator of just how upset they are and their need for retribution.
Small firms, on the other hand, are sitting in the catbird seat. They have what large clients want. They have low overheads, their chargeout rates are significantly lower than large firms, and they have lots of experience with fixed fee billing for commodity work. They’re also hungry to get their hands on large firms’ institutional client work. Large clients are interested in what small firms have to offer, since large firms aren’t responding to their repeated requests for alternative billing.