Law firms are improving revenue through increasing billing rates as demand softens, according to Citi Private Bank.The bank has analysed data for the third quarter of 2017 which revealed that rates were increasing by between three and 3.5 per cent. However, collection time had increased and salary rises saw expenses also jump from 3.4 per cent last year to 3.8 per cent. The trend is backed up by Altman Weil which found that legal departments cut back on law firm spend - with more legal departments making cuts (41 per cent) than those increasing spend (32 per cent) in 2017.
Increased spend from small departments
However, on the up side, for the first time since 2007, more law departments say they plan to increase their outside counsel spend next year than those that anticipate a decrease. Departments with one to 10 lawyers are driving this change in direction with one lawyer departments particularly looking to up their spend - 59 per cent reported they increased outside spend while only 12 per cent reported a decrease.