enterprise legal management trends report enterprise legal management trends report

Powered by:

Enterprise Legal Management Trends Report20

13

Powered by:

Enterprise Legal Management Trends Report2013 Mid-Year Edition

The Rise of “Large Enough” Law Firms2013

2013 CounselLink Enterprise Legal Management Trends Report

Executive Highlights

• “Large Enough” law firms are eating into market share of the “Largest 50.”Amongfirmswith201-500lawyers,referredtoas“LargeEnough”firmsinthisreport,theshareofU.S.legalfeespaidbyclientshasgrownfrom18%threeyearsago(July1,2009–June30,2010)to22%inthetrailing12monthsthatendedJune30,2013.Simultaneously,theshareofU.S.legalfeespaidbyclientstofirmswithmorethan750lawyers,the“Largest50,”hasgoneintheoppositedirection–droppingfrom26%to20%overthesameperiod.

• Even more dramatic shift in higher fee legal work. Theshiftinlegalworkfromthe“Largest50”firms(>750lawyers)tothe“LargeEnough”(201-500lawyers)categoryisfarmoredramaticwhenexaminingspecificcategoriesofmatters.“LargeEnough”firmshavealmostdoubledtheshareofhighfeelitigationmatters–thosemattersgeneratingoutsidecounselfeestotaling$1millionormore(HighFeeWork).“LargeEnough”firmsgrewtheirportionofU.S.HighFeeWorkfrom22%threeyearsagoto41%inthetrailing12months.

• “Large Enough” firms twice as likely to use AFAs. Asa%oftheirbillings,firmswith201-500lawyersbillednearlytwiceasmuchunderalternativefeearrangementsasdidthe“Largest50”firmsoverthetrailing12months.

• Average U.S. law firm partner bills at $381 per hour. Intermsofbilledhourlyratespaidbyclients,theaveragehourlybillingrateofapartnerinaU.S.lawfirmincreased2.7%overthepreviousyearto$381perhour.Thepartner’spracticearea,however,hasadramaticimpactonherhourlybillingrate.Forexample,adviceandcounselformergersandacquisitionscommandsahigher-than-averagebillingrateof$630.

• U.S. cities with greatest billable rate increases. Amongthe15largestU.S.cities,Philadelphia,Detroit,SanFrancisco,AtlantaandNewYorkarethefivecitieswherelawfirmhourlybillingratesincreasedabove2.5%inbothyear-over-yearandthree-yearcompoundannualgrowthrate.Phoenix,Boston,Houston,DallasandMinneapolislaggedbehind.


Introduction

ThisreportisthefirsteditionoftheEnterpriseLegalManagementTrendsReport,poweredbyLexisNexis®CounselLink®.Itsetsthebaselineforwhatwillbeasemi-annualupdateofseveralkeymetricsthatcaninformthedecisionsandsubsequentactionsofcorporatecounselandlawfirms.

ThereportrepresentsanalysisofasnapshotofdataavailableviatheCounselLinkEnterpriseLegalManagementplatform.Currently,thecollectivestreamofdataandprocessedinvoicesrepresentsmorethan$10billioninlegalspend,2millioninvoices,andwellover300,000mattersgatheredoverthepast4years,withthevolumeofdataavailableforanalysisgrowingatarapidpace.

Detailsaboutthemethodologiesused,definitionsandexpertcontributorsconductingtheanalysisarepresentedattheendofthereport.Unlessnotedotherwise,informationisbasedonthetrailing12monthsendingJune30,2013.

Table of Contents Page

ExecutiveHighlights 2

Introduction 3

MarketInsights:“LargeEnough”FirmsOutperformingthe“Largest50” 4

TheKeyMetrics 9

#1:BlendedHourlyRateforMatters–byPracticeArea 9

#2:LawFirmConsolidation-NumberofLegalVendorsUsedbyCorporations 11

#3:AlternativeFeeArrangement(AFA)Usage 13

#4:PartnerHourlyRate–Overall 15

#5:PartnerHourlyRateGrowth–byLocation(City/State) 16

#6:PartnerHourlyRateGrowth–byPracticeArea 18

AbouttheTrendsReport 20


Market Insights: “Large Enough” Firms Taking Share from the “Largest 50” Law Firms

CounselLinkdatareflectsagrowingportionoflegalworkbeinghandledbyfirmswith201-500lawyers,or“LargeEnough”firms.Theterm“largeenough”isappliedtothesefirmsbecausefirmsofthissizegenerallyhavefull-servicecapabilitiesacrossabroadarrayofpracticeareasandhavethecapacitytoappropriatelystaffandhandlecomplexandalsohigh-volume,repetitivelegalmatters.Whichfirmsareonthelosingendofthistrend?It’stheveryhighendofthesizespectrum,calledthe“Largest50”…representedbytheapproximately50firmsintheU.S.withmorethan750lawyers.Thismarketshareshiftisreinforcedbythefindingsassociatedwithlawfirmconsolidationandalternativefeearrangements(AFAs)describedlaterinthisreport.


Firms > 750 Lawyers

Firms 501-750 Lawyers



Firms < 50 Lawyers

Figure 1: Enterprise Legal Management Trends ReportMacro Trend: Legal work is moving from the “Largest 50” to “Large Enough” firmsBased on rolling 12-month totals ending June 30 for years 2010 to 2013

This chart shows the % of legal fees billed to CounselLink customers by law firms of different sizes, as measured by the number of attorneys at the firm, over the past 4 years. Each line shows the % of total billings that firms of that particular size captured in each of the past 4 years. For example, in the 12 months ending June 2013, 22% of spend was directed to firms with 201-500 attorneys.

0

10%

20%

30%

40%

50%

12 Months Ending June 2013




% o

f tot

al o

utsi

de c

ouns

el b

illin

gs

Threeyearsago,“LargeEnough”firmswereresponsiblefor18%ofoveralllegalbillings.Inthemostrecent12months,thesamefirmsarenowresponsiblefor22%oflegalbillings.Atthesametime,therelativeportionoflegalworkgiventothe“Largest50”U.S.firmshastrendeddownwardoverthepastthreeyearsfrom26%to20%.


0

10%

20%

30%

40%

50%





% o

f tot

al o

utsi

de c

ouns

el b

illin

gs

Overallbillings,however,includemultipletypesofmattersgeneratingvaryingamountsofaggregatefeesforlawfirms.Anindicationthathighfeeworkisshiftingfromthe“Largest50”firmsto“LargeEnough”firmscanbefoundinhighfeelitigationmatters.Evaluatingthetrendforthesametimeperiodsforlitigationmatterswithatleast$1millioninbillingsyieldscompellingevidencethat“LargeEnough”firmsarewinninghighfeework.Firmswith201-500lawyershavenearlydoubledtheportiontheyreceiveofsuchwork,from22%to41%overthelastthreeyears.

Firms > 750 Lawyers




Firms < 50 Lawyers

Figure 2: Enterprise Legal Management Trends ReportMacro Trend: “Large Enough” firms increasing share dramatically in litigation matters with high billingsBased on rolling 12-month totals ending June 30 for years 2010 to 2013

This chart shows the % of legal fees billed to CounselLink customers on litigation matters on which the total outside counsel billings were >$1M. Each line shows the % of these billings that firms of that particular size captured in each of the past 4 years. For example, in the last 12 months 41% of all outside counsel spend on these matters went to firms with 201-500 attorneys.


Whatmaybedrivingtheshiftinmarketshareawayfromthe“Largest50”tothe“LargeEnough”firms?OnekeymetrictrackedintheEnterpriseLegalManagementTrendsReportisthepercentageoflegalworkaclientprovidestoitstop10lawfirms(formorecontextrefertoKeyMetric#2,page11).Thedataindicatesthatthe“Largest50”firmsarenottheonesbenefitingwhencompaniesdirectmoreoftheirworktofewerfirms;bothhighlyandmoderatelyconsolidatedcompaniesprovide16%ofworktofirmswithgreaterthan750lawyers.Rather,firmswith501-750lawyersand201-500lawyersincreasetheirshareofbillings.Highlyconsolidatedcompaniessend40%oftheirworktofirmsinthesetwosizecategories,whilemoderatelyconsolidatedcompaniesandcompanieswithhighlawfirmfragmentationsend26%and11%,respectively,tothesefirms.

> 750 Lawyers501-750 Lawyers201-500 Lawyers51-200 Lawyers< 50 Lawyers

Firm Size

0

20%

40%

60%

80%

100%

Moderate Consolidation (Top 10 Firms Handle 50-80% of Work)

16%

9%

17%

15%

43%

High Consolidation (Top 10 Firms Handle 80% + of Work)

16%

20%

20%

17%

27%

% o

f out

side

cou

nsel

�rm

bill

ings

Figure 3: Enterprise Legal Management Trends ReportSupporting Point 1: Legal Departments Not Consolidating with “Largest 50”Based on trailing 12-months ending June 30, 2013

This chart groups corporate legal departments into two buckets – highly and moderately consolidated. The buckets are determined by the % of legal work handled by the department’s top 10 law firms.


Anotherfactorthatmaybedrivingthisshiftinspendfrom“Largest50”to“LargeEnough”firms,isthefrequencywithwhichthe“LargeEnough”FirmsofferAFAstotheirclientsrelativetothefrequencywithwhichthe“Largest50”offerAFAs.“Largest50”firmsbilllessthan3%oftheirfeesunderAFAs.Ontheotherhand,“LargeEnough”firmsbillnearlytwicethepercentoffeesunderAFAarrangements.The“Largest50”firmslagbehindinofferingandimplementingAFAsregardlessoftheaggregateanticipatedfeesortypesoflegalexpertiseorworkinvolved.(SeedetailsonhowmattersaredeterminedtobesubjecttoanAFAattheendoftheReport.)

Overall,thebattletowinbusinessisbeingwonby“LargeEnough”firmswithstrongreputations,diversepractices,multiplelocations,lowerratesandagreaterwillingnesstooffer,useandimplementAFAsthatmeetclientneeds.“LargeEnough”firmsdeliverabroadrangeofcapabilitiesatlowerpricepointsthantheirlargercounterparts.Themedianpartnerrateforfirmswithgreaterthan750lawyersis60%higherthanmedianratesforthe201-500lawyergroup.

Figure 4: Enterprise Legal Management Trends ReportSupporting Point 2: “Largest 50” firms less likely to execute matter under an AFABased on trailing 12-months ending June 30, 2013

0

2%

4%

6%

8%

10%

Law �rm size by # of attorneys

% o

f mat

ters

usi

ng a

n A

ltern

ativ

e Fe

e A

rran

gem

ent

> 750 Lawyers

501-750 Lawyers

201-500 Lawyers

51-200 Lawyers

< 50 Lawyers

This chart shows the % of billings under an Alternative Fee Arrangement (AFA) by firms of different sizes.


The Key Metrics

Eachupdateofthesemi-annualEnterpriseLegalManagementTrendsReportwillcoverastandardsetofkeymetricsthataremeasurementsofhourlylegalratesandclients’procurementoflegalservicesfromlawfirms.PerspectivesofferedinthereportrepresentviewsoftheteamofexpertsatLexisNexisaswellasthoseofcontributingpractitionersinlawfirmsandcorporatelegaldepartments.

Associate - Median

Paralegal - Median

Partner - Median

Legend

Blended matter hourly rate metrics

Timekeeper rate metrics

25th - 75th Percentile RangeMedian10th - 90th Percentile Range

Figure 5: Enterprise Legal Management Trends ReportKey Metric #1: Blended hourly rates and rate volatility differ by type of workBased on trailing 12-months ending June 30, 2013

0

$100

$200

$300

$400

$500

$600

$700

VolatilityIndex

Commercial

and Contracts

6

Hou

rly R

ate

Corporate,

General, Tax

7

Environmental

5

Finance, Loans

and Investm

ents

7

IP - Patent

7

IP - Trademark

8

Litigatio

n -

General

5

Mergers and

Acquisitions

4

Real Esta

te

4

Regulatory &

Compliance

10

Insurance

2

Employment

and Labor

5

See following page for guidance on interpreting this chart.


Interpreting the Chart:

This chart captures median rates for three different groups of timekeepers (partners, associates and paralegals) and the range of the blended average rate across multiple matter types. As a guide to interpreting the output, consider IP Patent compared to Labor & Employment. Both matter types have the same median partner rate - $375. But the range of the overall blended rate of these matters is significantly different. IP Patent work – U.S. and international prosecution work, but not litigation – ends up costing significantly less per hour using a blended rate model than does Labor & Employment work, because transactional IP Patent matters typically require far less partner time.

An additional metric provided in this section is called Volatility. The Volatility Index is a calculated marker indicating the variability encountered in blended matter rates. Based on a 10-point scale, the Index reflects how broad the rate spread is between the 25th and 75th percentiles of hourly rates. Higher volatility scores indicate greater variance in prices paid as a result of both the mix of timekeepers and individual hourly rates.

Again, consider IP Patent compared to Labor & Employment. The range between the 25th and 75th percentile for IP Patent rates is broader than the range paid for Employment and Labor work relative to the 25th percentile rate. On a 10 point scale, IP Patent has a volatility index of a 7, indicating that the mix of timekeepers and rates that are paid on these matters vary quite significantly. Some of the variance is likely explained by differences in rates for area of expertise based on the patented technology being protected.

Whilethereisconsiderablefocusintheindustryonindividuallawyerrates,itisequally,orarguablymore,importanttopayattentiontothebigpicture–theaggregateeffectofthemixoftimekeepersthatworkonamatter,andtheirresultingblendedaveragerate.ThemedianblendedrateishighestinMergers&Acquisitions,wherethemostexpensivefirmsaremoreoftenengagedandwherethequatityofpartnerengagementintheworkishigher.

Threemattertypeshaverelativelylowratevolatilityandarelesslikelytohaveratessubjecttonegotiationbetweencorporationsandfirms:

• Insurance

• MergersandAcquisitions

• RealEstate

Legaldepartmentscancomparetheirowndataagainsttheserangesofrates.Forexample,ratespaidonIPPatentworksubmittedandprocessedthroughCounselLinkarehighlyvolatile(7outof10).Dependingontheareaofpatentexpertiserequired,legaldepartmentspayingaveragematterratesonthehighendoftherangemayhavetheopportunitytonegotiatelowerratesoradifferentmixoftimekeepers.



This chart shows the degree of law firm consolidation among companies. The horizontal axis aligns participating companies into 9 segments, each addressing different degrees of consolidation. For example, the bar on the far right indicates 27% of participating companies have 90%-100% of their legal billings with 10 or fewer vendors … representing the most consolidated legal departments. On the other hand, the far left bar shows the least consolidated companies; only 1% of companies have less than 20% of their legal billings with 10 or fewer firms.

Figure 6: Enterprise Legal Management Trends ReportKey Metric #2: 57% of companies in the data pool have 10 firms or fewer accounting for at least 80% of outside counsel feesBased on trailing 12-months ending June 30, 2013

0

5%

10%

15%

20%

25%

30%

1%0%

5%

1%

6%

16%

13%

30%

27%

90-100%80-90%70-80%60-70%50-60%40-50%30-40%20-30%<20%

Index = 57%

% o

f com

pani

es

Degree of consolidation (% of billings from the company’s top 10 law �rms)


57%isthebaselineindexforthisfirstTrendsReportmeasurementoflawfirmconsolidation–that’sthepercentageoftotalcompaniesintheCounselLinkdatasetwhoarepayingatleast80%oftheirlegalfeesto10orfeweroutsidelawfirms.Thesecompaniesare“highlyconsolidated”.Diggingdeeperintothecross-sectionsofcompaniesprovidesmorerevealinginformationaboutwhereconsolidationisoccurring:

• 63%oflargecompanies(>$10billioninrevenue)arehighlyconsolidated.Thelargestcompaniesaremorefrequentlylimitingthenumberoffirmsusedforthebulkoftheirlegalwork.

• 80%ofmanufacturingcompanies(includingPharmaandBiotech)arehighlyconsolidated.

• Insurancecompanies–at43%versustheoverallindexof57%–demonstratetheleastconsolidation,handlinghighvolumesofmattersacrossmultiplejurisdictionswithmultiplefirms.


Figure 7: Enterprise Legal Management Trends ReportKey Metric #3: Alternative Fee Arrangements used in 10% of matters and 6% of billings in the past yearBased on trailing 12-months ending June 30, 2013

Practice Area

0

5%

10%

15%

20%

25%

30%

Finance, Loans

and Investm

ents

Employment

and Labor

Litigatio

n -

GeneralIP - P

atent

Regulatory &

Compliance

Insurance

Corporate,

General, Tax

Mergers and

Acquisitions

Environmental

IP - Trademark

Real Esta

te

Commercial

and Contracts

% of Billings Executed Under AFA

Average

These charts show the frequency with which Alternative Fee Arrangements (AFAs) are used by practice area. One chart shows the % of billings executed under AFA and the other is the % of matters utilizing AFA.


0

5%

10%

15%

20%

25%

30%

% of Matters utilizing AFA

Practice Area

Finance, Loans

and Investm

ents

Employment

and Labor

Litigatio

n -

GeneralIP - P

atent

Regulatory &

Compliance

Insurance

Corporate,

General, Tax

Mergers and

Acquisitions

Environmental

IP - Trademark

Real Esta

te

Commercial

and Contracts

Average

TheuseofAFAsvariessignificantlybylegalmattertype.Overthe12-monthperiodendingJune2013,9.7%ofmatterssubmittedandprocessedviatheCounselLinksolutionwereinvoiced,atleastinpart,underafeearrangementotherthantraditionalhourlybilling.ThecategoryoflegalworkreferredtoasFinance,LoansandInvestmentsoccupiesthetopspotforcategoriesofmatterswhereAFAsaremostofteninplace,drivenlargelybydebtcollectionmatters.

ThetotalamountofinvoicedlegalfeesattributedtoAFAsissmallerthanthe9.7%ofmatterscitedabove,reaching6.0%forthisTrendsReport.Twofactorsaffectthisresult:

• MattersthatgenerateloweraggregatefeesaremorefrequentlysetupunderanAFAthanaremattersthatgenerate,orareanticipatedtogenerate,largeraggregatefees.

• ClientsfrequentlyputAFAsintoplacewithrespecttoaportionorsubsetofworkonamatterorproject,ratherthanuseanAFAforanentirematterorproject,particularlywithrespecttodisputeresolutionorlitigationmatters.


Figure 8: Enterprise Legal Management Trends ReportKey Metric #4: Average rate for law firm Partners across all practice areas and geographies is $381, up 2.7% year over year.Based on rolling 12-month totals ending June 30 for years 2011 to 2013

$300

$350

$400

7/1/2012 - 6/30/20137/1/2011 - 6/30/20127/1/2010 - 6/30/2011

$362 $371 $381

2.5% growth 2.7% growth

This chart shows the average rate for a law firm partner in the U.S., excluding work on insurance matters.

AcrosstheU.S.,forthe12monthperiodendingJune30,2013,theaveragepartnerbillingratewas$381perhourforthe12monthsendingJune30,2013,whichisup2.7%fromtheprior12months.

Asanamalgamofdifferentlawfirmsizes,practiceareasandlocations,it’sareasonableindicatorofhowhourlyratesaretrending.Hourlyratescontinuetoclimb,evenifgrowthhasslowed.However,thesegrowthratesarewellbelowthehighsingle-digitgrowththeindustrygarneredduringpeakperiodspriorto2008.



In looking at partner hourly rates across 15 major metro areas, two indicators were plotted for each location to show both the compound annual growth rate (CAGR) over a three-year span, and the year-over-year change. A vertical line marker was added at the 2.5% growth rate as a guide to highlight locations operating above and below that rate.

DataforattorneyrategrowthbymajorU.S.cityshowthatPhiladelphia,Detroit,SanFrancisco,AtlantaandNewYorkareatorabove2.5%inbothcompoundannualgrowthrate(CAGR)andannualgrowthrate.Ontheoppositeendofthespectrum,fivecitiessawhourlyrategrowthbelow2.5%:Phoenix,Boston,Houston,DallasandMinneapolis.

Figure 9: Enterprise Legal Management Trends ReportKey Metric #5: 5 major cities show rate growth of 2.5% or more both over the last year and over the last 3 yearsBased on rolling 12-month totals ending June 30 for years 2010 to 2013

Minneapolis MN

Dallas TX

Houston TX

Boston MA

Chicago IL

Phoenix AZ

Miami FL

Washington DC

Seattle WA

Los Angeles CA

New York NY

Atlanta GA

San Francisco CA

Detroit MI

Philadelphia PA

1% 2% 3% 4% 5% 6% 7% 8%0

3 Year CAGRYOY Change


Figure 10: Enterprise Legal Management Trends ReportKey Metric #5: Growth in average partner rates varies by state, averaging 2-3% year over year growthBased on rolling 12-month totals ending June 30 for years 2012 to 2013

3.1% to 5.0%2.1% to 3.0%1.0% to 2.0%(-2.0%) to 0.9%Insufficient Data

Growth Rate

Chicago

Seattle

Detroit

BostonNew York

PhiladelphiaWashington DC

Atlanta

MiamiHoustonDallas

Phoenix

Minneapolis

Los Angeles

San Francisco

This chart shows the annual growth over the past year in partner billing rate by state.

Acrossallstates,themedianyear-over-yeargrowthforpartnerhourlyratesis2.2%.Thecompoundannualgrowthrateoverthepastthreeyearsis2.7%.


AggregatestatisticsbasedonCounselLinksolutioninvoicedatasubmittedduringthelast12monthsidentifyMergersandAcquisitionasthepracticeareawiththehighestaveragehourlypartnerrate–$630.NextisGeneralCorporatewhichincludesadviceandcounsel,antitrustworkandtax-relatedmatters.Inpart,bothpracticeareasatthetopoccupythosespacesbecausecompaniesoftenuselargerfirmsforthesekindsofmatters.Inthelast12months,the“Largest50”firmshandled33%ofMerger&AcquisitionandCorporatelegalwork,versus20%foralltypesoflegalwork.AtthelowerendoftheaveragehourlyratespectrumisInsurancework.Insurancecompaniesdemand,andnegotiateaggressivelyfor,lowratesontheircommoditydefensematters.

Figure 11: Enterprise Legal Management Trends ReportKey Metric #6: Partner Hourly Rate – by Practice AreaBased on trailing 12-months ending June 30, 2013

$630

$575

$527

$513

$500

$495

$446

$405

$392

$390

$340

$170

Median Partner Hourly Rates

Mergers and Acquisitions

Corporate, General, Tax

IP - Trademark

Regulatory & Compliance

IP - Patent

Finance, Loans and Investments

Commercial and Contracts

Real Estate

Environmental

Litigation - General

Insurance

Employment and Labor


Figure 12: Enterprise Legal Management Trends ReportKey Metric #6: Four practice areas showing 2.5%+ partner rate growth both over the last year and over the last 3 yearsBased on rolling 12-month totals ending June 30 for years 2010 to 2013

This chart shows the 3 year cumulative annual growth rate (CAGR) and the year over year growth in partner rates by practice area.

Turningtopartnerrategrowthbypracticearea,fourofthe12practiceareacategorieshaveshowngrowthatorexceedinga2.5%rateduringthepastyearandoverthepreviousthree-yearperiod:IP–Patent;Corporate,General,Tax;Finance,LoansandInvestments;andCommercialandContracts.PartnerratesforEnvironmentalandInsurancemattersaregrowingmoreslowlythanratesinotherpracticeareas.

Environmental

Insurance

Employment and Labor

Real Estate

Litigation - General

Regulatory & Compliance

Commercial and Contracts

Finance, Loans and Investments

IP - Trademark

Mergers and Acquisitions

Corporate, General, Tax

IP - Patent

0 1% 2% 3% 4% 5%

3 Year CAGRYOY Change


About the Trends Report

Terminology:

• Matter Categorization–CounselLinkusersdefinethetypesofworkassociatedwithvariousmattersthatwereanalyzedandcategorizedintolegalpracticeareas.Forthisanalysis,alltypesoflitigationmattersareclassifiedaslitigation;e.g.,apatentlitigationmatterisclassifiedaslitigation,notaspatentwork.Datainthisreporthasbeenmappedtooneof14practiceareas:

o CommercialandContracts,includingmattersoncontractingofdealtermsfornon-M&Atransactions

o Insurance,includingmedicalmalpractice,workerscompensation,autoclaims,titleinsuranceclaims,etal.

o EmploymentandLabor,includingimmigration,non-compete,benefitsandgeneralhumanresourcesrelatedmatters

o MergersandAcquisitions,narrowlydefinedtoencompassM&Atransactions

o RealEstate,includesrealestatetransactions

o RegulatoryandCompliance,coveringmattersthatcompaniesdefineasregulatory,compliance,governmentaffairsoragovernmentaction/investigation

o Litigation,asabroadcategorycoveringlitigationmatterswithpatents,personalinjury,breachofcontract,productliabilityandothers

o IPPatent,patentprosecutionandcounseling,includingfilingsintheU.S.andinternationally,excludingpatentlitigation

o IP-Trademark,forworkclassifiedasTrademarkmatters,includingregistrationsandprotection

o IP-Other,coveringIPmattersnotclassifiedasPatentsorTrademarks

o Finance,LoansandInvestments,includessecurities,creditandcollections,andotherfundingactivities

o Environmental,forallmattersdefinedasenvironmentalorenergyrelated

o Corporate,General&Tax,toincludeantitrust,restructuring,bankruptcy,taxandothergeneralcorporatework

o Other,asanopencategoryforallothermattersandbillsnotalreadyaddressed

• Insurance Matters–Forcomparisonpurposes,chargesonInsurancematterswereremovedfromtwopiecesofanalysiscoveringPartnerHourlyRate–Overall,andPartnerHourlyRateGrowth–byLocation.

• Cities and States–Tocapturelocationofbillingtimekeepers,timekeepersweremappedbasedontheirlawfirmofficezipcodes.Wherecitylocationsareused,theyincludeanyzipcodewithinthatcity’smetropolitandivisionasdefinedbytheU.S.CensusBureau.


• Law Firm Roles–Inreferencingpartners,associates,andparalegals,theunderlyingdataincludedsomediscreteroles,suchas“seniorpartner”or“juniorassociate.”Insuchinstances,thosetimekeeperswereplacedwithinthebroaderpartner,associate,andparalegalsegments.Non-partnerlawyertitles,suchas“ofcounsel,”wereclassifiedasassociates.

• Alternative Fee Arrangements (AFAs)–InvoicechargesarecategorizedwithinfeestructuresutilizedintheCounselLinksolution.Thosechargesinnon-hourlyfeestructureswereclassifiedasalternativefeearrangements(AFAs).Additionally,chargescodedashourlywereclassifiedasAFAifthetimekeeperlevelwasapartnerandthecalculatedhourlyrateexceeded$1500.Fortimekeeperlevelsotherthanpartner,chargeswithratesofgreaterthan$1000werecategorizedasAFAs.Lastly,workforwhichinvoiced-timenarrativesincludedtermssuchasflatfee,fixedfeeorsimilarkeywords,wascategorizedasamattersubjecttoAFAs.

• Company Size–Basedon2012revenuecitedinpublicsources,companiesweregroupedintothesethreesizecategories:

o $10Billion

o $1-10Billion

o <$1Billion

• Company Industry–CompaniesweremappedintothehighestlevelofNAICScodesbasedonpublically-availableinformation,resultinginthisarrangement:

o FinanceandInsurance

o Manufacturing

o RetailTrade

o Other

Expert Contributors:

TheCounselLinksolutionhasearnedanindustryreputationforenablingcorporatecounseltousedataeffectivelyasabasisforimprovinglegaldepartmentperformanceandoutcomes.Twofactorsvalidatethesecustomeropinionsandperceptions:

• SpecificlegalspendandmattermanagementfeaturesintheCounselLinksolutiongivecorporateclientsrobustcapabilitiestoevaluatelegaldepartmentperformanceandmetricsonanongoingbasis,entirelyontheirown.

• LexisNexisinvestssignificantresourcesinprofessionalconsultingandserviceofferingsthataddavaluablelayerofexpertiseinanalytics,benchmarkingandbestpractices.Theoverallgoalwiththeseoptimizationprogramsistohelpclientstranslatedata-drivenanalysisintoactionsthatimproveefficiencyandbottom-lineresults.

CounselLinkisanEnterpriseLegalManagementsolutionsuiteformattermanagement,legalspendmanagement,legalhold,analyticsandstrategicconsultingservices.


SeveralLexisNexisindividualsplayedamajorroleinanalyzingthelatestCounselLinkdataandcompilingthisfirstEnterpriseLegalManagementTrendsReport,specifically:

Principal Author

Kris Satkunas DirectorofStrategicConsulting

AsDirectorofStrategicConsultingatLexisNexis,KrisleadstheCounselLinkteaminadvisingcorporatelegaldepartmentmanagersonimprovingoperationswithdata-drivendecisions.Krisisanexpertinmanagingthebusinessoflawandindatamining,withspecificexpertiseinmatterpricingandstaffing,practiceareametricsandscorecards.

PriortojoiningCounselLink,KrisservedasDirectoroftheLexisNexisRedwoodThinkTank,whichshealsoestablished.Forfiveyears,Krisworkedcloselywiththoughtleadersinlargelawfirmsconductingunbiaseddata-basedresearchstudiesfocusedonfindingsolutionstolegalindustrymanagementissues.Earlier,sheledtheRedwoodAnalyticsservicesgroupandthebusinessoflawconsultingpracticeforlargelawfirms.DuringthistimesheworkedwithkeymanagementatoverahundredlawfirmstoevolvethefinancialmodelsandanalysesdevelopedbyRedwoodAnalyticsforlargelawfirms.

Krishasauthorednumerousarticlesandspokenatlegalindustryconferencesandevents.ShecametoLexisNexisin2000afterhavinghonedherfinanceskillsasaSeniorVicePresidentinStrategicFinanceatSuntrustBank.SheholdsaB.B.A.inFinancefromTheCollegeofWilliam&Mary.

[email protected].

Key Contributors

Jonah Paransky VicePresident&ManagingDirector

AsVicePresident,ManagingDirectorforLexisNexisCounselLink,Jonahisresponsibleforthedeliveryofsuperiorenterpriselegalmanagementsolutionsandservicestothecorporatelegalindustry.Jonahhasextensiveexperienceandsuccessinbusiness-to-businessproductmanagementandmarketing,withexpertiseinidentifyingmarketopportunitiesandbringingnewproductsandservicestomarket.Heisarecognizedexpertinthelegalsoftware,SaaS(software-as-a-service),informationsecurityandITinfrastructuremarkets.JonahreceivedaBachelorofScienceinelectricalengineeringandaBachelorofArtsineconomicsfromtheUniversityofPennsylvania.


Justin Silverman SeniorDirector&ProductChampionofDataAnalytics

AsSeniorDirector&ProductChampion,DataAnalyticsforLexisNexis,Justinisresponsibleforthedevelopmentofsolutionstohelpthelegalindustrymakebetteruseofavailabledatatoinformdecision-making.PriortoLexisNexis,JustinmanagedaprofessionalservicesbusinessatGersonLehrmanGroup.Hehasmorethansixyearsofmanagementconsultingexperience,includingthreeyearsatOliverWymanandthreeyearsattheBostonConsultingGroup.JustinhasaJDfromNorthwesternUniversityLawSchoolandanMBAfromtheKelloggSchoolofManagement.

Mike Haysley DirectorofStrategicServices

AsDirectorofStrategicServicesatLexisNexisCounselLink,Mikehelpscorporatelegaldepartmentsmanagethebusinessoflaw.Hehasmorethan15yearsofexperienceinrolesthatincludeanin-housepositionastheDirectorofLegalOperationsforalargelegaldepartment,andconsultingtolargelegalorganizations.Thisbackgroundprovidesauniqueperspectiveofhavingpersonallyaddressedandmanagedmanyoftheissuesfacinglegaldepartmentstoday,aswellasunderstandingbestpracticesandvaryingneedsoflegaldepartments.MikeworkswithanexpertteamatLexisNexistoadviselegaldepartmentsonimprovingoperationsandresults.HejoinedLexisNexisCounselLinkfromWasteManagement,wherehewastheDirectorofLegalOperations.MikegraduatedfromTexasA&MUniversitywithabusinessdegree,receivedhislawdegreefromtheUniversityofHouston,andislicensedtopracticelawinTexas.

IfyouhavequestionsorcommentsabouttheTrendsReport,orwanttolearnmoreaboutCounselLinksoftwareandservices,visitwww.lexisnexis.com/counsellink,orcontactusviaemail:[email protected]:855.974.7774.Formediainquiries,pleasecontact:[email protected].

www.counsellink.com 866.703.3902 [email protected]

LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under license. SmartReview and CounselLink are registered trademarks of LexisNexis Examen, Inc. Other products or services may be trademarks or registered trademarks of their respective companies. © 2013 LexisNexis. All rights reserved.

enterprise legal management trends report enterprise legal management trends report

Documents