In the three years to 2016, the average price paid for business law services is expected to increase further as higher corporate profit and a greater influx of regulations strengthen demand.
Los Angeles, CA (PRWEB) November 22, 2013
Business law services have a buyer power score of 2.7, indicating a mixed level of purchasing power among buyers. Prices for business law services have increased steadily over the past 50 years, propelled by greater regulatory complexity and corporate consolidation, which has underpinned greater demand for legal services. “Although price growth decelerated during the recession and slow recovery period due to lower underlying business demand, billing rates have continued to rise, particularly among the nation's largest law firms,” IBISWorld procurement analyst Sean Windle says. Currently, the market’s largest companies are Baker & McKenzie, DLA Piper, and Skadden, Arps, Slate, Meagher & Flom LLP. Demand for business law services is relatively inelastic due to regulatory requirements and the unavailability of substitutes, which limits buyer purchasing power.
The price for business law services is high. However, pricing varies significantly among law firms. According to the latest information from the 2012 Law Firm Billing Survey, conducted by the National Law Journal, the price of law services ranges from $130 per hour to $1,285 per hour based on a nationwide sampling of law firm billing rates.
Hourly fees vary depending on the experience of the lawyer, type of law practiced, size of the law firm, the firm’s location and the complexity of the case. An attorney’s experience level is a key factor in their hourly billing rates, with partners typically averaging rates of $501, while associates average $317 per hour, according to the 2012 Law Firm Billing Survey. “Typically, the largest law firms command premium pricing, partly due to their greater resources and access to top-quality lawyers,” Windle says. Furthermore, rates among the largest law firms have increased at a faster pace than small law firms. According to a national study of 4,000 law firms, from 2009 to 2011, attorney bill rates increased 13.0% at firms with 510 to 1,000 lawyers, while rates at smaller firms with one to 50 lawyers rose more slowly.
Although historically, procurement professionals have played a small role in purchasing legal services, the role of procurement professionals has expanded in recent years due to a renewed focus on cost-cutting among businesses. Consequently, procurement professionals are increasingly working in tandem with in-house legal departments to develop more competitive pricing among external suppliers. Key strategies among buyers include greater efforts to contain costs by negotiating volume discounts, requiring fixed fees or caps and alternative arrangements beyond the traditional hourly fee. Furthermore, the use of reverse auctions, in which law firms submit competitive bids, have become more common over the past three years, which has mitigated price growth among suppliers. For more information, visit IBISWorld’s Business Law Services procurement research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of business law services. Business law offices provide legal counsel in real estate, taxation, bankruptcy, antitrust, regulation, copyright and merger and acquisition legal cases. Furthermore, vendors also provide legal research services, debt collection law services and healthcare claim law services. Service providers do not specialize in criminal law, civil liability, family law, legal review or jury and witness services.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Vendor Financial Benchmarks
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.