[Ed. Note: The following post is reprinted from our sister blog, Guerilla Law Firm Blog. The behavior of some “BigLaw” firms is so outrageous that it warrants reprinting. If anyone wonders why rates are so high at big law firms, read this post and you may begin to understand.]
Two Lawyers of Failed Firm Receive $16 Million?
Recently we decided to raise our rates. While the rates charged by other firms in Wisconsin have risen by 17% over the last 5 years, we held steady. Yesterday I reluctantly raised rates an average of 10%, our first increase since we became a firm in 2009. Even with our increase, our rates are still half the national average. Today as I catch up on a week’s worth of Wall Street Journals, I read that theca court appointed trustee for failed BigLaw firm Dewey & LeBouef has filed a complaint to claw back part of the $15,900,000 in pay that firm’s executive director and CFO made over the last 6 years.
Paying millions to men who presided over the demise over one of the largest law firms in America is like paying a bonus to Edward Smith, Captain of the Titanic. (Smith once said, “God himself could not sink this ship!”)
The trustee believes the men knew the firm was insolvent as early as 2009 yet continued to take huge salaries.
Huge salaries and bloated infrastructure is why BigLaw charges such outrageous rates. And as the number of law firm failures increases, it is obvious that clients have had enough.
Unfortunately, many businesses continue to hire the biggest firms when facing “bet the company” decisions or problems. More and more are learning, however, that better service is available for far lower costs at speciality boutiques and regional firms.
The BigLaw law firm model is dying, even if the partners at the top don’t yet realize it. Some don’t realize it until the firm goes under. Virtual firms and speciality boutiques represent the next generation of legal services; firms that can put together the proper team, that have low overhead and that know the value of their services and can price accordingly.
Want to know more about us? Mahany & Ertl is a national boutique firm specializing in tax and fraud litigation. We don’t try to do everything and we are proud that over half our clients pay on an alternative fee basis. Even when we bill hourly, our rates never exceed $375. More importantly, we believe we deliver a better product than that of lawyers charging 3 times as much.
Post by Brian Mahany, Esq.
Tag as: virtual law firm, boutique law firm, virtual lawyers, BigLaw, law firm collapse, law firm failures