Earlier this month, the 2019 LexisNexis CounselLink Enterprise Legal Management Trend Report was released. This is the 7th year the Report, which looks at data from invoices of over $33 billion in legal spending processed through the CounselLink platform, was compiled and issued.
CounselLink is a cloud based legal management platform that provides work management, financial management, vendor management, and legal holds solutions for corporate legal departments. It offers analytics and benchmarking tools for evaluating invoices and fees.
I had a chance recently to talk to Kris Satkunas, Director of Strategic Consulting and author of the Report about the findings late last week.
Satkunas identified three key and interesting trends from the Report that to me are troubling for mid-size law firms.
Satkunas identified three key and interesting trends from the Report that to me are troubling for mid-size law firms.
First, Satkunas noted that the use of alternative fee arrangements (AFA) increased from use in less than 10% of matters—where it has been for the last several years—to 12.2% last year. While the overall percentage is still small, the increase is the largest since CounselLink has been tracking this statistic. Employment litigation continues to be the area where AFAs are most commonly used. This is because the issues and work processes in these matters are the most predictable given the volume and available data.
These providers, given their structure and makeup, may be able to do the work for lower flat fees, ultimately shifting what it means to be a lawyer and legal professional and what their respective roles in a case might be.
Satkunas also noted, importantly, there appears to be a greater willingness to use AFA on portions of the work—say discovery depositions—in a case. This greater willingness is significant since it could