For the 300th episode of The Geek in Review, we celebrate in true “three geeks” fashion by bringing back two familiar voices: Kris Satkunas, Director of Strategic Consulting at LexisNexis, and legal pricing expert Toby Brown, CEO at DV8 Legal Strategies. Kris joins to walk through highlights from the newly released 2025 CounselLink Trends Report, and Toby brings his trademark insight… and a touch of skepticism to the discussion. Together, they explore what the latest data reveals about legal pricing, client behavior, firm strategy, and the evolving landscape of law firm-client relationships.
The conversation opens with a focus on the headline trend: partner billing rates continue to rise steeply, particularly in high-value areas like M&A and regulatory work. Despite clients claiming to negotiate hard on pricing, the data on effective rates, what clients actually pay, suggests those increases are sticking. Kris points out that clients are becoming more sophisticated in managing blended rates and staffing strategies, using analytics and technology to influence outcomes, even if hourly billing still dominates.
A recurring theme is the widening rate gap between large and mid-sized firms, now a staggering 61%. Kris attributes this to the concentration of high-rate work in large firms and their dominance in practices like M&A and regulatory. Toby adds that the presence of pricing professionals at larger firms contributes to more strategic rate setting—something mid-sized firms often lack. The team also discusses a new report metric analyzing new matter spend, which reveals that even fresh legal work is increasingly flowing to the largest firms, countering narratives that mid-sized firms are winning market share.
When the conversation shifts to Alternative Fee Arrangements (AFAs), Kris cautiously celebrates a slight uptick in usage, while Toby remains doubtful about long-term momentum. They agree that lawyers’ difficulty in scoping matters remains a key barrier. The role of project management professionals is highlighted as crucial for moving the industry forward on AFAs—but adoption is still slow, especially outside of established comfort zones like IP and employment law.
Greg brings up another area ripe for disruption: ALSPs and their potential to absorb high-volume, low-risk work. While Kris hasn’t yet seen a data-supported shift toward ALSPs, Toby sees tremendous opportunity—particularly when ALSPs combine process standardization and AI tools. The hosts also discuss specific use cases, like LegalMation for employment litigation, where existing tech could already reduce cost and inefficiency, if only firms were willing to change.
The episode closes with a look ahead. Kris notes the eye-popping rate growth among associates—some nearing $2,000/hour—as a surprising trend, while urging caution in interpreting conflicting data from different sources. Her “crystal ball” prediction? Legal rates will likely continue to climb, especially in high-stakes practice areas, while AFAs may finally gain ground if firms invest in the infrastructure to scope and manage work properly. As always, the team ends with good humor, mutual respect, and a shared love for data—exactly the energy you’d expect for The Geek in Review’s milestone 300th episode.
Listen on mobile platforms: Apple Podcasts | Spotify | YouTube
[Special Thanks to Legal Technology Hub for their sponsoring this episode.]
Blue Sky: @geeklawblog.com @marlgeb
Email: geekinreviewpodcast@gmail.com
Music: Jerry David DeCicca
Transcript:
Marlene Gebauer (00:00)
Hi, I’m Marlene Gabauer from The Geek in Review. I have Stephanie Wilkins here from Legal Technology Hub who’s going to tell us about her weekly watch list and column, which I pay attention to all the time.
Stephanie Wilkins (00:11)
Thanks, Marlene. I love hearing that. ⁓ I’m really writing it so people can learn about the industry. So what it is is that every Tuesday, I take a moment to step back and reflect on what’s happening in the market. And then I pick a particular theme to focus on. Sometimes it’s inspired by a conference I’ve just attended or by a pattern I’ve spotted in the news articles I read or the press announcements I get in my inbox, but it’s something different every week. In the past, I’ve written about everything from the ongoing flurry of M&A and funding activity we’re still seeing.
Marlene Gebauer (00:15)
You
Stephanie Wilkins (00:41)
in 2025, carrying out from 2024. I’ve written about how the market’s taking new approaches to educating lawyers and future lawyers about AI, the ways law firms are collaborating with legal tech companies that we haven’t seen in the past before, and it’s really just a little bit of everything. But then every week, what is consistent is at the end of the column, I publish what we’ve been calling my weekly watch list.
where I compile a list of specific developments in either legal tech or AI generally that caught my eye in the past week. ⁓ Often they might be stories that are still developing and they haven’t quite full stories yet or news announcements that I didn’t have time to write a whole article about. But it’s what I’m watching to keep my pulse on the market. People often ask me how do I stay on top of things and it really is just reading. And what I’ve thought I should do is put it all together in a list for others to find interesting too so they also can keep their pulse on the market and stay up to date.
Last week, for example, the watch list had highlighted two new partnerships announced by Litera with QorusDocs and Harbor, DocuSign’s new contracting agent, and there was a new legal tech company that came out of stealth called Finch, just among many things. So every week is, again, completely different and things I personally find interesting. So if people want to go along on the weekly watch list and column journey with me, you can either read it on legaltechnologyhub.com every Tuesday, or you can also sign up for our free newsletter.
and the LTH Insights newsletter will bring you that column every week into your inbox.
Marlene Gebauer (02:11)
That’s excellent. It’s a great curated tool for busy professionals full of really rich information. So thank you.
Stephanie Wilkins (02:18)
No problem. And now I have to go write this week’s.
Marlene Gebauer (02:21)
you
Marlene Gebauer (02:29)
Welcome to The Geek and Review, the podcast focused on innovative and creative ideas in the legal industry. I’m Marlene Gabauer.
Greg Lambert (02:36)
And I’m Greg Lambert and this week we are bringing back our good friend Kris Satkunas Director of at LexisNexis to talk about the brand new 2025 Trends report from CouncilLink. So Kris, welcome back.
Kris Satkunas (02:54)
Thank you, good to be here.
Marlene Gebauer (02:55)
Yeah, welcome, Kris.
Greg Lambert (02:56)
And
so this is our 300th episode of the Geek in Review. And so to celebrate that, we thought we’d make it a real three geeks episode and bring on one of the OG, the original Toby Brown. So Toby, thanks for jumping in and joining us.
Marlene Gebauer (03:01)
You know, we have a surprise, right?
Toby Brown (03:17)
Thanks for having me. These are always fun.
Greg Lambert (03:20)
And the reason that we’re doing this is because episode 200 also featured Kris and Toby. So we thought we’d repeat that success. then Kris, we’ll bring you back in a couple of years when we hit episode 400. How’s that?
Marlene Gebauer (03:33)
you
Kris Satkunas (03:34)
I’ll be here. Absolutely.
Toby Brown (03:36)
Hmm
Marlene Gebauer (03:38)
gonna talk about the report, this episode. So this year’s report, again, it highlights significant increases in partner billing rates, especially with high value practice areas like M&A and regulatory. So how are clients responding to these increases? And are you seeing a more proactive rate negotiation or staffing strategy shift as a result?
Kris Satkunas (04:03)
Yeah, so there are a few things related to that. One about more proactive rate negotiations that you’re asking about. So I hear clients talk about how hard they negotiate rates. keep in mind that the rate increases in the trends report are actually based on effective rates or the rates that are actually paid, So we’re seeing very large increases that are being passed
Toby Brown (04:19)
Thank you.
Kris Satkunas (04:33)
through despite those negotiations. I’ve got no doubt that some clients are more aggressive with rate negotiations, but it’s not showing up in the averages that we report. then as far as staffing strategy goes, yeah, I definitely think that’s coming into play. And we know this, some of these, this data is in the report for example, if I look at corporate work,
on average partners in the corporate practice raise their rates about 6.7%. But the blended average rate on corporate work overall, right, accounting for all the different types of people who work on it increased only half as much. So there has to be mixed changes that are happening that are affecting that overall rate not to be increasing at the same
that partner rates are in other individual attorneys for that matter. And I think that what I’m seeing from the corporate legal departments that I work with that they’re definitely getting more savvy with analytics, right? Just understanding that fundamental fact that the weighted average rate is more important to the bottom line than any individual attorney rate that may get approved or paid. So I think there is definitely that market savviness that is taking root.
Greg Lambert (05:53)
Is the effective rate because they’re coming in % increases and then the negotiations will knock 20 % off of that, so it’s effectively an 8 % increase?
Kris Satkunas (06:04)
Yeah, it
could be. So it could be that they negotiated off of the initial rate that was offered, or it could also be that there are adjustments made to the bill, either by the law firm or by the corporate client who reduces the amount that’s paid and that reduces the effective rate as well.
Marlene Gebauer (06:23)
we go ahead.
Toby Brown (06:24)
Is it, I, this is my color commentary moment here. So my reaction on this is clients don’t buy on price. In fact, I developed a saying with Jeff Carr, which some of you may have heard of him, and it is that no one becomes general counsel by saving money. What the clients are buying are results and outcomes. And so price is, you know, three, four, five on the list. So this doesn’t surprise me.
Law firms are raising their rates and clients are paying it.
Kris Satkunas (06:54)
And especially
for M&A work, regulatory, right, like the bet the farm kind of stuff, that they’re not gonna be pushing back on those rates. They may push back on some other types of rates a little bit more, but not there. Yeah, great.
Toby Brown (06:57)
yeah.
Marlene Gebauer (07:06)
I mean,
even, even though there’s kind of new technologies that can kind of streamline some of that work. I mean, we’ve seen, we’ve had people on the podcast that literally are like, we can do flat fee M&As given the technology that we have. So there’s still no questioning or pushback on that.
Toby Brown (07:24)
Not on, I wouldn’t say on an M&A when people, you know, as a pricing person, people are always like, oh, with all this new technology, everyone’s gonna start fixed fee billing. And Kris, you and I had this conversation on number 200. That’s not how clients know how to buy. They don’t know how to scope. And so they will pay by the hour. And you you could go, I’ve had this happen where I’ve gone to a general counsel, a major energy company and said, we’ll do this on a fixed fee. And she said, nope.
Because we don’t know how to evaluate fixed fees. We do know how to evaluate hourly rates. So I just don’t see, in fact, I’d notice there’s not a big increase in the number of AFAs still. Kris, I remember last time you made that comment that everyone’s been predicting this for decades and it’s not showing in the data.
Kris Satkunas (08:07)
Yeah,
there’s not enough comfort there. We may talk a little bit more about that as we go along. But yeah, I agree with you that the industry continues to do what they’re comfortable with. that’s be billed by the hour and pay top rates for work they see as critical.
Greg Lambert (08:13)
Yeah.
the report, you also mentioned that the gap in rates between large and the mid-sized firms is also still growing. I think now it’s around Is this shift really reflective of an increasing kind of winner-take-most dynamic in legal procurement? And actually, Kris, want to before you answer that, can you define what your
What you’re defining as large versus midsize.
Kris Satkunas (08:58)
Yes, yeah, it’s important. So the largest bucket of firms that we measure in this analysis with at least 750 lawyers in them. And then the next category is 500 to 750. So we have, I think, five or six different buckets. But the largest firms in our
analysis are 750 lawyers or more. And these are US firms that we’re talking about when we break them into sizes.
Greg Lambert (09:28)
And now, talk about that dynamic of why these large firms are kind of getting the bigger bucket.
Kris Satkunas (09:35)
Yeah, so I don’t know that I would characterize it as winner take most, there are several interrelated things that are at play. So I think the most simple one is that partners in the largest firms are increasing their rates more than other categories of firms. So that right there starts to create that separation.
And importantly, practice mix plays a big part here. So in the report, we break down rates by practice area and, you we’ve been talking a lot about M&A already. So at the top of that chart, the median rate charged by an M&A partner is over $1,200 an hour. So that’s the median rate for an M&A partner. And then take that into the context of the largest firms.
have more than 70 % of the market share for M&A work. another practice, regulatory work, the largest firms have 60 % of the share of regulatory work. So that’s another high rate practice. And we also see that lawyers in those high rate practices already are raising their rates.
at increasing levels compared to the other practices. you know, you put all of those things together and you can see why that gap is as big as it is. I think when we first started doing the analysis for this report, the gap between the largest firms and the next category of firms was maybe 30-something percent, and now it’s at 61, right? So it really has grown. And I think one other thing I didn’t mention here is that
⁓ relative to 10 years ago when we started producing this report, are more firms that are in that largest tier bucket, right? There have been a lot of mergers. So I think that if we were to break down that largest group, we’d see a lot of differentiation within it. And I think at some point I will start looking at the data that way and break down that biggest bucket a little bit more.
Toby Brown (11:42)
I would add to that that from the pricing side, my guess is to answer this question is as you move down the stack of firm size, it’s far less likely they have a pricing team or an experienced pricing team that’s going to go, hey, wait a minute. Because I can say when I consult with firms more in the midsize and I look at their rates, I’m like, okay, first your rates are not very well structured. And secondly, you’re probably not pacing with the market. fact, coincidentally, I was talking about another consultant
morning and they were saying yeah this mid-sized firm one year they didn’t raise rates whereas if you’ve got an effective pricing team that would not be the case.
Kris Satkunas (12:22)
Yeah, it’s who’s keeping their eye on the data that’s going to drive profitability for firms. And similarly on the in-house side, if you don’t have a legal ops team who is paying attention to the various rates that are being charged, you’re not going to be on top of the cost. So yeah, I completely agree it’s having the right team in place to manage this.
Toby Brown (12:35)
Proof.
Greg Lambert (12:45)
There’s a lot of middlemen keeping the lawyers in check, aren’t there?
Toby Brown (12:45)
So. ⁓
Kris Satkunas (12:50)
Keeping them in check and driving things forward too, yeah, absolutely.
Toby Brown (12:55)
So Kris, beyond that, the report introduces an expanded view of law firm market share by new matter spend. What do you think that metric can tell us about the future trends in the law firm client relationships and how clients are procuring legal?
Kris Satkunas (13:10)
Yep.
Yeah. So this is where I’m really glad to be talking to all of you. Thank God I’m talking to other geeks who like data and think about different ways to look at it. I’m pretty sure that when I’ve introduced this metric to some other people that their eyes have glazed over, but I think it’s important. So the background on this is that sometime early last year, I read an article that had a headline to the effect of
Marlene Gebauer (13:19)
you
Kris Satkunas (13:38)
clients are departing from mid-sized firm. And it caught my eye because the data that I always look at doesn’t really support that, right? The market share data shows that the largest firms are continuing to have the biggest piece of the market share. ⁓ But I realized that that overall share data is based on total legal spending, because I’m thinking about this from the side of ⁓ in-house. So they’re looking at the spend.
And if I look at the spend in a given year, about two thirds of that spend is associated with matters that were originated in a prior year. So I thought a better way to evaluate whether there is actually a shift in which size firms are getting the work would be to look at, for each year, just look at the new matters created in that year.
Toby Brown (14:21)
out.
Kris Satkunas (14:34)
and then which law firms they were assigned to and look at the spend just for those matters. we do that now. So that’s a new metric in the report. I think it’s important because I think it’s a better leading indicator of what the overall share will be in future years or billing on those matters will continue in 2025 from 2024 and some cases beyond or well beyond.
I guess the bottom line to this, to doing this analysis is looking just at new work and who’s getting that new work, large law increase their share of fees. So it completely invalidates that headline, which I was skeptical about. I would imagine you may have been too when you read it, but we will continue to look at this metric as a better leading indicator of future share by law firm of legal work.
Toby Brown (15:30)
So Kris, I had heard the same about clients moving their work down. And so I called a friend of mine who’s in a very large legal department and he actually confirmed that they indeed were moving some work down. And he goes, said, Toby, it’s great. I get a partner instead of an associate. They’re way more efficient because they’re way more experienced. And he goes, and their rates are actually less than the associates at the large firms. But he did say there was a downside is that now they’ve got more firms.
Kris Satkunas (15:41)
Okay.
Toby Brown (16:00)
to manage. so.
Kris Satkunas (16:02)
Yeah, but also, you know, what I mentioned before, I think is important that we have that bucket of firms with, you know, the largest tier that I’m looking at has 750 or more lawyers. So you could move down even within that bucket, right? So move from the 10th largest firm to the 50th largest firm, and you’re going to see some of the effect of what you just said. So it may not, they may not be moving between the
peers that we have established in this report. But like I said, I think it’s going to be important for us to start to break that down a little bit going forward. Yeah, good point. ⁓
Marlene Gebauer (16:39)
Why do they have more firms if they are taking on more work?
Toby Brown (16:44)
Well, if they’re going to mid-size firms, you can have one large firm do a whole bunch of work, or you can have 20 mid-size firms do the same work. So that’s the issue.
Marlene Gebauer (16:50)
I see. Do it. Got it.
Greg Lambert (16:55)
And
Kris, one of the things that…
sparked in my mind was what about ALSPs? Because we’re seeing things move to small firms. week we had one of the Thomson Reuters folks on that talked about ALSPs trying to move their way in. And I think a lot of us, especially with the hype around all the AI tools, thought that that would be the first
group that would really kind of leverage that? Are you seeing any of the work moving away from the contemporary more over to ALSP’s?
Kris Satkunas (17:33)
You know?
Not so we don’t. I don’t look at that data in depth, but I have because I’ve been asked this question a lot, taking taking a look at it in the past. We haven’t seen huge movement there yet, and maybe that is going to be kind of like a phase slow to move toward that adoption or maybe, you know, as new technology takes ⁓ takes more hold that will start to see that movement.
increase ⁓ but as of now I would say no we’re not seeing a big shift away from in terms of market share seeing that move to ALSP instead of law firm.
Toby Brown (18:09)
I’ll be curious if that shows up in the data. And Greg knows my thoughts on this, because he and I have talked about it. I think it is a huge opportunity for ALSPs. My comment earlier about no one becomes GC by saving money. If you go way down to where they have high volume, low risk, in-house lawyers careers are not dependent on it, like contract review or single plaintiff employment litigation. I think there’s a huge opportunity for ALSPs to come in, leverage AI.
you know, take the whole thing instead of, you know, having it go to 50 firms and do it more effectively, do it more efficiently, and obviously do it at a lower cost. So I think there’s a huge effort there. So I’ll be curious if the future data starts to show that.
Kris Satkunas (18:51)
Yeah, I agree. I completely agree it’s a big opportunity and how that shows up in the data will be, we’ll just have to pay attention to that kind of extra carving out of these types of vendors. So yeah, we’ll keep eye on it.
Marlene Gebauer (19:09)
So I believe in the 2024 report, there was discussion about plateauing AFAs at around Alternative fee arrangements we’re talking about, I guess that they’ve made incremental changes this year. you know, do you see this, despite the fact there’s great opportunity, I mean, do you see this as a steady evolution or is this something that we think that’s gonna blow up?
Greg Lambert (19:36)
Are we going to stay at 9 % forever, Kris?
Marlene Gebauer (19:36)
more. How are we going to stay at 9%? Are we going to blow? Are we going to blow up and jump?
Toby Brown (19:39)
9.1! 9.1!
Kris Satkunas (19:43)
Well, I know you’ve heard me express my disappointment in this for the last few times that we’ve talked. So we’ve been at 9%, right? This year, we’re close to 10, but is that a huge jump? Well, I guess relative to sitting at 9 % for several years, it is, and it’s noteworthy. that’s looking at what percentage of matters have some sort of an AFA in its
billing structure, right? It may not be a complete flat fee, but there’s some component of non-hourly billing there. But we also did see a bit of an uptick ⁓ in the percentage of dollars that get billed under an AFA. So that’s the other way that we look at it. But, you know, it’s not huge. continue to be the two front runner
practices, employment and IP, that everybody’s more comfortable with those pricing arrangements because we’ve been doing them for a long time. know, it’s hard for me to answer this question. I really want to say I’m optimistic that this is the beginning of creative pricing in a way for clients to better manage their budgets too. But, you know, given the
extremely slow adoption of AFAs that we’ve talked about that Toby has referenced too. You know, I feel like I need to see more than one year of a slight gain before I’m going to declare finally crossed the line and we’re making movement with AFAs. So let’s talk about this again next year.
Greg Lambert (21:19)
Okay.
Marlene Gebauer (21:19)
Yeah. I mean, I just think back to what you guys were saying about comfort, you know, comfort levels and, and, know, is that what is, is reflected here.
Toby Brown (21:27)
I think in part it’s comfort levels, but this is one of my soapbox issues. Lawyers do not know how to scope a matter. They’re incapable of doing that. And I don’t know how you can bill on a fixed fee without scope. And here’s the irony of it. You know who has to read all the Statement of Works and approve them? It’s the legal department. But yet they don’t know how to do that for their own work.
In fact, another friend of mine at another legal ops thing, they do budgets and budgets get adjusted all the time and up, of course. And I said, how do they decide to adjust them? Did they go, here’s a material change in scope? He laughed. He goes, no, they just said they had to do more work. So until you could act a lawyer, a lawyer has to be part of this because they have the subject matter expertise around the scoping issues involved in engagement. And they just don’t have those skills and they don’t seem
want to get them. And I get that because it’s easy not to actually have a scope and a statement of work and to live by the scope and the budget. That’s just an added task or an added burden on your work. So I’m more pessimistic than you, Kris, that this is going to grow much until lawyers figure that out.
Kris Satkunas (22:40)
going to maintain my position of optimism on this. I may be retired by the time that happens, but we’ll see. But to that point, Toby, like what you said about having pricing people in larger law firms, in this case it’s project management people, right? It’s having the support of people who do have the scoping ability.
Marlene Gebauer (22:44)
You
Greg Lambert (22:45)
I can’t believe Toby is pessimistic.
Toby Brown (23:02)
Yeah.
Kris Satkunas (23:05)
That may not be the lawyers. In fact, usually it’s not, right? But they get involved in it. So I think I just made a note to myself that I can’t remember if I’ve ever looked at our large law firms using AFAs more. They’re more likely to be the ones that have the project management skills on their teams. So that’s something, definitely something I want to follow up on.
Toby Brown (23:18)
Yeah.
you
I would suggest, depending on how you’re going to follow up on it, it’s a combination of a legal project management professional and the lawyer. Because the LPM person understands scope and how to go through a scoping exercise, but they can’t be an expert in patent litigation and in M&A and in privacy and all these things. They rely on the lawyer’s subject matter expertise to do that. And that’s good pricing in LPM people. They have methods of sort of teasing.
Kris Satkunas (23:46)
Right.
Toby Brown (23:57)
out scope by talking to the lawyers, but the lawyers really need some better foundational skills.
Kris Satkunas (24:03)
Absolutely.
Greg Lambert (24:04)
Toby, I’m wondering, so like we said, ⁓ IP, labor and employment tend to be the areas where we get a lot of AFAs. I think those areas are probably going to be some that start to really try to find ways to leverage technology to help them. And so the way my brain works on this is it thinks,
Well, once you get the technology kind of set up for the efficiencies, then if things are outside of scope, it would seem apparent that these are things that fall outside the efficiencies that you’re getting with the technology. you think, are we going to be able to kind of connect those two?
Toby Brown (24:53)
I hope so, but I’m aware of one technology. Can I name a technology provider? ⁓
LegalMation and they have a fantastic tool for single plaintiff employment stuff and they have a couple of anchor customers who are on the client side. I actually introduced them to my last firm, which shall remain nameless, but you can look it up and said our labor group should really look at this tool. It is very, very powerful and they’re like, Toby, that’s not the way we do it. So I still see some hesitancy for lawyers who go, well, that’s not the way we do it and this is how we get the outcomes we get.
With single plaintiff I would hope that wall would fall down a lot sooner because there’s just not that much risk in any one. Or if there is one with the risk, you pop it out and make it an exception. far and away, those are not… Well, in fact, the way I say it with the ALSP side of it on, any one of them has super low risk. The risk comes when you’re looking at hundreds of them, which is why you should standardize and leverage technology and all
things but that’s a tech that exists and has existed and people aren’t adopting it.
Kris Satkunas (26:01)
Okay.
Greg Lambert (26:03)
Well, Kris, I’m going to switch over to something else that I think ⁓ the report’s been a little pessimistic on. And I think you started this a year or two ago, and that was looking at the mix of timekeepers on the report and how sophisticated in-house legal departments have come to leverage that tactic of
Toby Brown (26:09)
Good night.
Greg Lambert (26:29)
kind of mixing a number of timekeepers on how’s that look this year and what do you think? Is there any role for technology in helping kind of keep an eye on that mix of timekeepers?
Kris Satkunas (26:41)
⁓ Yeah, I mean definitely so we touched on this a little bit earlier, right? We talked when I said mix is part of what is keeping overall that blended rate down relative to the individual rate increases and And I mentioned to you that I see growing sophistication in in-house counsel in trying to understand what makes that that blended rate different than the individual, you attorney rate so there’s like just
think sophistication growing in matter management, spend management. Think about, know, of course I’m speaking bias from the perspective of CounselLink right? So the customers I work with have a ton of data and they have a ton of tools at their disposal. So we talked about matter budgets before. Some of ⁓ our clients use staffing lists, right? They will only work with pre-approved.
attorneys and won’t allow other ones to come onto a case without them getting approval. And we’re definitely seeing greater adoption of these sorts of tools. in the past, you know, I think we’ve probably had a matter budgeting solution for years and years and years, but in the past in-house counsel probably asked for a budget for some cases, right, or some matters.
via email, maybe back when envelope, right, they would get a budget number, they’d have some kind of number in their head. But now, for those that are adopting these sorts of tools, that budget detail is stored in systems like ours. And then billing against those budgets is enforced by technology. So, you know, if you’re starting to approach a budget, bells and whistles will start to go off if you’ve over billed in a certain category.
might get rejected. So I mean, think that in-house counsel have come a long way. think they’re going to progress. I think that where some of the skill sets are lacking is that like asking for a budget and getting a budget and checking a box is not really managing to a budget, right? It’s knowing whether or not a budget is reasonable and whether the law firm has made
good efforts to try to keep costs down. I think understanding what the budgets mean and actually comparing them against historical data is an area that we could improve. But the tools are there, they’re being utilized more and I think slowly that sophistication will grow.
Toby Brown (29:17)
Hopefully.
Kris Satkunas (29:19)
guess so
many cynics in this room.
Marlene Gebauer (29:22)
Ha
Toby Brown (29:23)
Yeah, I haven’t had anything to drink. That’s part of the problem. ⁓ So I have a couple of… I know. It’s lunch. So I have a couple of trend questions for you. So the first question is, based on the decade-long arc of these reports, what trend surprised you the most this year? ⁓
Greg Lambert (29:26)
Toby’s getting a late start today.
Kris Satkunas (29:31)
you
Greg Lambert (29:33)
Hahaha
Toby Brown (29:45)
The second trend is what trend do think the industry continues to under appreciate or misinterpret? And you can answer them in any order you choose.
Kris Satkunas (29:54)
Okay, so something that I didn’t really used to pay much attention to, but I’ve been paying more attention to in the past couple of years, our associate rate. Traditionally, our report has looked at partner rates as kind of the anchor metric that we always can use as the baseline and see what’s happening. But one thing that stood out in this last year is that, and there are associates,
billing at over $1,900 an hour. And that’s kind of mind blowing to me. And I’ll date myself for sure here. But I remember when it was headline news that a partner was billing $1,000 an hour. And now $1,000 or a little bit over $1,000 is the median partner rate across all different practice areas, right? So you’ve got that. And then you have associates who are approaching
$2,000 an hour, I that’s just wow to me to think that the rates have increased over, you know, not that long, but a period of time. So I think that’s kind of the most surprising thing is to take that number and put it in perspective. And then I think as far as what people underappreciate or maybe misinterpret, so you know, I’m one source of this sort of data. I believe in
I believe in the way that we analyze it, that it’s solid and that our metrics are the accurate ones. I see all kinds of numbers out there. So I think what’s confusing to the industry is that you can calculate an average increase in a lot of different ways, for example, right? And there are so many numbers that get thrown out there I think that’s the cause of a lot of the misinterpretations.
It’s not so much that people underappreciate the data. I think that they are being turned on data that doesn’t all dive together. So use my data. It’s reliable.
Marlene Gebauer (32:01)
You
Toby Brown (32:02)
That
second one is interesting because I haven’t thought about that way. I, but you mentioned we’re all data geeks. I’m always looking for, you know, some sort of confirmation and trends. And so it’s not as confusing to somebody like me who’s looking at it all the time, but to a partner at a law firm, it probably is. ⁓
Kris Satkunas (32:20)
Well,
like take for example, so when I say the average partner increased rate by 5.1%, we do that analysis at a timekeeper level. So I’m looking at Toby Brown and what he built last year compared to the prior year and calculating that change, right? And then I’m taking the average of all of the timekeepers after using that methodology. And if they didn’t build both years or not in the data,
Others have taken, I’ve seen, I’ve asked people how they calculate it. They may take for their pool of data, what was the average rate or median rate in 2023 and what was the average or median rate in 2024 and then compute the difference between those two, but you’ve got apples and oranges, right? You may not have the same timekeepers. So, you know, that’s just one example and I’m sorry if I’m like totally geeking out on this now, but.
Toby Brown (33:17)
⁓ I think
Greg Lambert (33:18)
You’re in the right
audience.
Toby Brown (33:18)
that
That’s a great way of demonstrating because that’s what I say it for me, it confirms, but I’m aware of the differences between those where a partner wouldn’t be on your first trend. I just have to say the profit guy in me, warms my heart that they find the firms are finding like, wait a minute, we make our profit off of associates. We should raise those rates. I was like, Oh, wow. I wish I had thought of that. Um, so in some respects, that’s encouraging that they finally figured it out because well,
Kris Satkunas (33:39)
Thank
Toby Brown (33:49)
I suppose the other thing is if they’ve been raising their partner rates, they’ve created headroom to move associate rates up. Because that compression issue has always been a big issue for law firms where some partners have held their rates down and you don’t want partners with rates lower than associates. So maybe again this goes to the sophistication of their pricing team.
Kris Satkunas (33:58)
That’s good.
That’s right.
Greg Lambert (34:12)
And Kris Rupp.
Kris Satkunas (34:12)
probably said, yeah,
because these are definitely associated in those high value practice areas, right? So they’re likely in the larger law firm, the largest law firm for sure.
Greg Lambert (34:23)
So
if the associates billing 1900, what’s the partner?
Toby Brown (34:29)
Hopefully way higher. It’s gonna start with a two that’s all I know.
Marlene Gebauer (34:29)
you mean percentage, like percentage difference.
Kris Satkunas (34:33)
Yeah.
Greg Lambert (34:36)
be a three.
Marlene Gebauer (34:36)
Maybe three. That’s what I was thinking.
Kris Satkunas (34:37)
I think they’re
approaching the three, yes. Yeah, it is.
Marlene Gebauer (34:44)
So Kris, we’ve gotten to the crystal ball question and I know you’ve done this before. But before we do that, we went back, we checked what you predicted last year. So do you wanna hear it?
Kris Satkunas (34:58)
Yeah, I better. ⁓ I hope I was somewhat accurate.
Toby Brown (35:01)
Perfect.
Greg Lambert (35:01)
You said AFAs were gonna
be at 15%.
Marlene Gebauer (35:04)
I think you did pretty well. So here’s what the AI tool summarized from the last answer. So you can also say that it hallucinated and get out of it if you don’t like the answer. ⁓ Kris predicts continued yearly increases in legal service rates and anticipates a growing adoption of alternative fee arrangements within the next five years.
Toby Brown (35:05)
Thank
Ding ding.
Marlene Gebauer (35:27)
as corporations seek
to manage rising costs. She also foresees the increasing integration of AI that will reshape the legal business model, requiring in-house counsel to strategically invest in talent to leverage the technology effectively and potentially leading to the commoditization of certain transactional legal tasks.
Greg Lambert (35:52)
you do.
Kris Satkunas (35:54)
I think the first part was spot on. The AI piece, I think we’re having a harder time measuring that right now, what adoption really is.
Greg Lambert (36:01)
That measure, what do mean?
Marlene Gebauer (36:03)
But there definitely is more integration. mean, you are seeing people, you are seeing firms, are seeing in-house adopting it.
Kris Satkunas (36:14)
Absolutely, yeah.
And in a longer term, would still expect all of those things to continue to move forward.
Greg Lambert (36:25)
All right, well Kris.
Marlene Gebauer (36:25)
All right. So,
Kris Satkunas (36:25)
Not to
Marlene Gebauer (36:26)
so,
Kris Satkunas (36:26)
ask.
Marlene Gebauer (36:26)
so basically here’s, here’s your chance now. Like what, what, what, what does this, what, what’s the prediction for this time around?
Greg Lambert (36:28)
Yeah.
Toby Brown (36:29)
Thank
Kris Satkunas (36:33)
Well, I don’t know, can’t we just hit rewind and use that one again? That seemed pretty good. The other thing that I will say that I see coming maybe this year or next year is that given concerns about the economy, where legal demand may be, I think that firms are probably going to increase their, or try to increase their rates even more than what we’ve been seeing. So things have kind of leveled out somewhere around 5%.
Marlene Gebauer (36:35)
Ha ha ha!
Kris Satkunas (37:03)
for the past three years. I could see that going up maybe to six or 7%. But we’ll see. I think that with that high value work like M&A and regulatory that we said before, think those, they ask for, they’ll probably get paid. They’ll probably agree to whatever those extra high rate increases will be. But hopefully there’ll be a little more pushback on rates from other timekeepers and then this continuation of managing
mix of firms and timekeepers. yeah, that’s my, probably not a huge surprise in my crystal ball response. And I do think that the AI piece is just going to continue to expand. And what I don’t know how to predict is what the effect will be on billing from law firms related to AI in the short term.
Greg Lambert (37:58)
Are you thinking about looking at how, because there’s a lot of uncertainty with the presidential administration, know, tariffs, possible recession, anything that you’re thinking about for the 2026 report that might factor in some of these issues, or do you think that’s just too hard to
Kris Satkunas (38:21)
Yeah, I think it is a little too hard to measure outside of, you know, surveys and things like that of trying to take the temperature of people and what changes they may be making. You know, what I’ve been hearing from our customers and general councils out there is just it’s hard to manage chaos, right? So I don’t know how to measure how hard it is to manage chaos, but I think that’s really at the root of things. So.
Yeah, but it is a good point that there may be something next year that we should look at to try to evaluate that. And I’d love to hear from you guys if you can think of anything that might be in the data that could help tell a story related to that.
Greg Lambert (39:08)
I’m sure we’ll put our brains together and think of something for you. All right, well, Kris Satkunas from Director of Strategic Consulting at LexisNexis Thank you very much for sharing your insights once again and for coming on with our friend Toby Brown for episode 300.
Kris Satkunas (39:28)
It’s my pleasure to be here. Thanks for having me on this very important episode.
Marlene Gebauer (39:34)
Thanks to both of you and thanks to all of you, our listeners for listening to the Geek in Review podcast. If you enjoyed the show, please share it with a colleague. We’d love to hear from you on LinkedIn and Blue Sky.
Greg Lambert (39:46)
And Kris, I know ⁓ the link is not easy for the report to give verbally, ⁓ so we’ll make sure we put that on the show notes. if listeners want to learn more about it or to reach out to you, where’s the best place to do that?
Kris Satkunas (40:03)
I would, LinkedIn is probably going to be the easiest way to find me and I definitely will respond to anybody that has any questions or wants to chat. So yeah, thank you.
Marlene Gebauer (40:14)
as always the music you hear is from Jerry David DeCicca Thank you Jerry.
Greg Lambert (40:18)
Thanks, Jerry. All right. And thank you all for being on here.