CounselLink Study: Big Law Flexes Client Staffing to Wrestle Market Share for Highly Competitive IP Litigation Work

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Underlying Data, Amid $18 Billion in Legal Invoices, Suggests Legal Departments' Adoption of AFAs Broadens Significantly

CounselLink ELM Trends Litigation Market Share
This study makes a powerful statement that the largest law firms have staked a claim on IP litigation work, which is a sizable segment of the legal market worth billions of dollars every year

A new study published today shows the largest law firms are vigorously and successfully pursuing intellectual property (IP) litigation work. The fourth edition of the CounselLink® Enterprise Legal Management Trends report – Largest Law Firms Grab a Sizable Majority of IP Litigation Work – provides a comprehensive analysis of spending in the U.S. legal market. In a dramatic twist in trends, the report found that the “Largest 50” law firms – those with 750 or more attorneys – have wrestled away a majority of market share in the highly competitive IP litigation practice area from smaller rivals.

The largest firms are winning a growing share of market in IP litigation – from 36% in 2011 to 61% by year ending 2014. The Largest 50 firms are winning this business against the next two categories of law firms based on size by attorney headcount – the “Second Largest” and the “Large Enough” – those firms with 501-750 attorneys and 201-500 attorneys respectively.

“This study makes a powerful statement that the largest law firms have staked a claim on IP litigation work, which is a sizable segment of the legal market worth billions of dollars every year,” said Kris Satkunas, director of Strategic Consulting at the CounselLink business and principle author of the report. “The findings also indicate a new level of adaptability amid a competitive market for legal work. Moreover, Big Law isn’t taking this space by brute force, but rather by focusing on right-sizing staffing on corporate client accounts.”

The analysis surfaced compelling evidence that law firms in the Largest 50 category, those with 750 or more lawyers, have evolved their staffing models – reassigning IP litigation work to more junior partners in order to meet client demands of lower cost. Three data points in IP litigation work highlight this underlying trend:

1) The hourly median partner rates have declined over the course of four years, from $656 in 2011 to $622 in 2014;

2) Individual partner rates have remained essentially flat where the median 1-year change was 0.7% and the 3-year CAGR was -0.4%;

3) Partners at the Largest 50 firms are billing fewer hours on IP litigation matters handled by their firms – less than 1% on half of all matters in this practice area.

By contrast, opposing trends are found among the Large Enough category, the third tier of firms with between 201 and 500 attorneys. Again, focusing purely on IP litigation work, and following the same pattern of analysis as above:

1) The median hourly partner rate rose significantly from $560 in 2011 to $651 in 2014;

2) Individual partner rates in the Large Enough category rose 2.7 percent year-over-year;

3) 5.8% (CAGR) over the course of three years. More than half (53%) of all IP litigation matters, serviced by Large Enough firms had partners billing 20-60% of the total hours.

“The changing staffing models among the Largest 50 demonstrate these law firms have consciously adapted to market conditions in this particular segment of legal work,” added Satkunas. “In industry terms, it may be a leading indicator that the largest law firms are responding to the macro trend CounselLink found in the inaugural ELM Trends Report published in late 2013. Whether this trend extends into other practice areas remains to be seen.”


There’s strong evidence to suggest that alternative fee arrangements (AFAs) are a growing staple of legal department fee structures than surface data initially suggests. For example, even while the overall percentage of matters, structured under models other-than-the-billable-hour, have remained flat at roughly 9%, the number of legal departments engaging AFAs has risen sharply.

In 2011, 59% of legal departments structured legal work under an AFA. In four years that number has increased to 76% or more than three-fourths of the legal departments that have processed nearly $18 billion in legal spend through the CounselLink system. Corporate legal departments serving the “pharmaceutical” and the “scientific, professional and technical services” industries show the greatest inclination towards AFA adoption. Among law firms, smaller firms remain twice as likely to engage in alternative billing.

“Corporate legal continues to mature and these departments are finding more sophisticated means to implement alternative fees by breaking large matters into phases and pricing those phases accordingly,” said Satkunas. “Those law firms willing to engage AFAs and find a profitable model that also delivers value are more likely to find a receptive audience among GCs.”

The full report also provides an updates to six key metrics – a set of metrics the report has consistently tracked over the course of four reports published semi-annually since October 2013. These metrics provide industry benchmarks ranging from law firm panel consolidation to average partner hourly rates across practice areas and by geographic location.

Unlike survey data, the CounselLink ELM Trends report is based on an analysis of legal invoices which were submitted by law firms and processed by corporate counsel through the CounselLink system. Since 2009, the data set represents nearly $18 billion in legal spending across more than four million invoices and in excess of one million matters. It is effectively how corporate counsel is “voting” with its collective wallet. The data is aggregated, anonymized and presented back to participating legal departments who use the data to produce more granular and customized reports for benchmarking purposes.

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About CounselLink
The CounselLink business is a leading provider of cloud-based software for Enterprise Legal Management which includes matter management, legal spend management and legal hold solutions designed to help corporate legal departments manage operations while providing analytics and benchmarking tools for better decision making. Expert professional services and product support teams are available to help users maximize the benefits of the branded solution. The CounselLink business offers innovative and tiered proprietary software solutions to addresses the unique requirements of both large and small legal departments. CounselLink is part of the LexisNexis software division. Visit us online at

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