Legal Commentary

The Economy and Rate Increases: Someone Is Not Listening

By Patrick J. Lamb

Two online articles caught my eye this morning: they seem so interrelated.  In Forbes.com, the article titled "The Worst Is Not Behind Us" includes this prediction:

"The prospect of a short and shallow six- to eight-month V-shaped recession is out of the window; a U-shaped 18- to 24-month recession is now a certainty, and the probability of a worse, multi-year L-shaped recession (as in Japan in the 1990s) is still small but rising. Even if the economy were to exit a recession by the end of 2009, the recovery could be so weak because of the impairment of the financial system and the credit mechanism that it may feel like a recession even if the economy is technically out of the recession."

And Law.com includes "GCs Prepare For Rate Battles."  The gem from this article:

Law firms are playing coy. They say publicly that they haven't made up their minds, but several consultants and at least one management source say they expect rates to go up in 2009, although not as much as in years past. . . . .

Law firm consultants are predicting a 3 percent to 5 percent rate hike for 2009. That's less than the 5 percent to 10 percent increases firms made in recent years when the economy was strong.

There is a horrible disconnect between the forecast from Forbes and the forecast about rate increases.  Is it possible or that law firm leaders are hard of hearing?  Do they live such insulated lives that the don't see the hardship their business clients must cope with every day?  Do they not realize the goodwill they could develop and the marketshare they could capture if they resorted to innovative pricing strategies rather than doing "the same old thing?"

Full post as published by In Search of Perfect Client Service on November 13, 2008 (boomark / email).