Law Firm Economics 101: A Client-Focused Primer on the Primary Levers of Law Firm Performance

The commercial terms negotiated between law firms and client legal departments have long been plagued by information asymmetry at best, and just plain misunderstanding at worst. The business models of law firms and the underlying metrics and incentives are often misunderstood by client-side counterparts, and this more than anything else generates substantial friction in the negotiation and implementation of fee arrangements. Whether hourly billing or one of the many varieties of alternative fee arrangements, there are common, fundamental economic principles underlying the proposals firms make, the parameters within which they must operate in order to run a sustainable business. Anyone who has ever asked any of the following questions should attend this session: What investments and expenses must firms make to deliver the caliber of services clients demand? How does the revenue model seek to cover these costs and generate surplus funds to reward good performance? How are these economics applied at the…