Bombarded with law firm rate increases? Think twice before giving your law firm what they want.
2020 has brought unprecedented uncertainty to economies around the globe. Most businesses have been dramatically impacted, leaving their bottom lines in far different shape than last year. Along with financial instability comes the pressure to cut costs and evaluate each budget line item with heightened scrutiny. Your law firms’ rates should be no exception.
Historically, law firms have sheltered themselves from the crushing economic impact of past crises — even profiting in some instances — all while the companies they serve suffer. Though you might view certain firms as paramount to your business, complying with rate increases that reflect above-market fees shouldn’t be a knee jerk reaction…especially during a global pandemic.
Regardless of how effectively your legal department has operated in the past, it’s clear we all need to rethink our strategy for 2021. There’s no time like the present to determine what brings value to your business and what’s draining your bottom line.
Corporate legal departments should shift their focus towards the following initiatives:
- Reducing cost expenditures in the short and long-term
- Identifying the key firms who are willing to lean-in and share in the economic burden
As we approach 2021, it’s time to move from a reactive state to a proactive state when it comes to law firm pricing.
There’s just one way to get there — data.
Shed your reputation as an idle price-taker. Sophisticated legal-tech solutions, like Bodhala, offer data-backed insights that can strengthen your negotiation power with your law firms.
By leveraging data, legal departments can surface granular analyses of their spend and insights on how their law firms’ rates stack up against others in the market to keep their rate increases in check.
Don’t have the data to execute this just yet? We’re here to help.
Bodhala recommends requesting a 15-20% discount from your law firms on all work executed throughout the duration of the Covid-19 crisis.
In addition to aiding your cash conservation efforts, this request allows your legal department to identify which firms are truly critical partners for your business. Which law firms are willing to put their egos – and paychecks – aside to help their clients in an urgent time of need?