The more things change, the more they remain the same.
LexisNexis recently announced the release of its 2021 Enterprise Legal Management Trends Report. In its eighth year, the Trends Report, according to LexisNexis, is based on an analysis of more than $40 billion in legal spending, almost 8 million invoices, and more than one million matters.
This year’s report provides updates on its six critical billing related metrics. It is based on 2020 charges billed by outside counsel. And it includes an analysis of the impacts of the COVID-19 crisis. The report pulls from several granular subcategories of matters to provide more meaningful comparisons. These subcategories include litigation, intellectual property, mergers and acquisitions, etc.
The key findings:
The largest firms continue to get richer and do more high rate work. Firms with more than 750 lawyers continue to account for the largest share of U.S. legal spend. In 2020, 49% of outside counsel fees was paid to the largest 50 firms, consistent with results from previous years. Also, the three matter categories commanding the highest partner rates are mergers and acquisitions, regulatory compliance and finance, and loans and investments.
Consistent with the above, the larger the firm, the higher the timekeeper rate and the greater the 2020 rate increases: partners working in high-rate practice areas had the highest average rate increases in 2020. Regulatory and compliance rates showed the highest growth at 4.1% on average. The next highest average partner rate increases occurred in Corporate (4%), Finance, Loans, and Investments (3.9%), and Mergers and Acquisitions (3.9%) matters. The Categories with the lowest rate increases: litigation and insurance work. Only class action litigation tolerated rates above $450 per hour.
Alternative fee arrangements (AFAs) continue to increase and gain favor among corporate counsel. In 2020, 16.8%
