In this episode of The Geek in Review podcast, hosts Marlene Gebauer and Greg Lambert welcome back Kris Satkunas, Director of Strategic Consulting at LexisNexis CounselLink, to discuss the findings of the 2024 Trends Report. The report, now in its 11th year, provides valuable insights into the legal industry, particularly focusing on hourly rates and spending patterns.

Satkunas explains that the data used in the report comes from the CounselLink Insight benchmarking database, which normalizes and anonymizes data related to matters and billing from CounselLink customers. This year’s report highlights significant increases in hourly rates, with firms relying more heavily on this lever to increase revenue and offset rising costs due to inflation. However, the degree to which rates have increased in recent years is noteworthy, with certain practice areas, such as M&A and IP litigation, commanding even higher rate increases.

Despite the substantial rate hikes, the report shows that blended rates at the matter level are not increasing as much, suggesting that other factors, such as staffing and leveraging, are helping to mitigate individual rate increases. Satkunas also notes that while there is a perception that high rates may drive clients to mid-sized firms, the data does not support this trend, with large law firms maintaining and even growing their client base.

The discussion also touches on the adoption of alternative fee arrangements (AFAs), which has remained relatively stagnant over the years, with only around 10% of matters having some form of AFA. However, Satkunas remains optimistic that the increasing pressure on corporations to manage costs, coupled with the adoption of AI and other technologies, may lead to a greater uptake of AFAs in the coming years.

Looking ahead, Satkunas predicts that rates will continue to rise, but the legal industry will likely see changes in the business model as AI becomes more integrated into legal practices. She emphasizes the importance of in-house counsel investing in the right talent to assess their needs and determine which technologies will best address those needs. Additionally, as AI advances, more transactional work may become commoditized, potentially leading to increased adoption of AFAs for these components of legal matters.

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Transcript

Continue Reading 2024 Trends Report: Dynamics Shaping the Future of Legal w/CounselLink’s Kris Satkunas

We talk with Michael Bommarito, CEO of 273 Ventures and well-known innovator and thinker in legal technology and education. Bommarito and his colleague, Daniel Katz were behind GPT-3 and GPT-4 taking the Bar Exam. While he and Katz understand the hype in the media reaction, he states that most of the legal and technology experts who were following the advancements in generative AI, expected the results and had already moved on to the next phase in the use of AI in legal.

Michael Bommarito on his farm in Michigan, alongside his trusty friend Foggy.

While we talked to Michael a couple of days before the news broke about a lawyer in New York who submitted a brief to the court relying upon ChatGPT to write the brief and not understanding that AI tools can completely make up cases, fact pattern, and citations, he does talk about the fact that we are falling behind in educating law students and other in understanding how to use Large Language Models (LLMs) properly. In fact, if we don’t start teaching 1Ls and 2Ls in law school immediately, law schools will be doing a disservice for their students for many years to come.

Currently, Bommarito is following up his work at LexPredict, which was sold to Elevate Services in 2018, with 273 Ventures and Kelvin.Legal. With these companies, he aims to bring more efficiency and reduce marginal costs in the legal industry through the application of AI. He sees the industry as one that primarily deals with information and knowledge, yet continues to struggle with high costs and inefficiency. With 273 Ventures and Kelvin.Legal, he is building solutions to help firms bring order to the chaos that is their legal data.

AI and data offer promising solutions for the legal industry but foundational issues around education and adaptation must be addressed. Bommarito explains that decades of inefficiency and mismatched data need to be adjusted before the true value of the AI tools can be achieved. He also believes that while there might have been many false starts on adjustments to the billable hour through things like Alternative Fee Arrangements (AFAs) in the past, the next 12-36 months are going to be pivotal in shifting the business model of the legal industry.

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Contact Us: 

Twitter: ⁠⁠⁠⁠@gebauerm⁠⁠⁠⁠, or ⁠⁠⁠⁠@glambert⁠⁠⁠⁠
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Email: geekinreviewpodcast@gmail.com
Music: ⁠⁠⁠⁠Jerry David DeCicca⁠⁠⁠

⁠Transcript⁠:


Continue Reading Michael Bommarito on Preparing Law Students for the Future, and His Quest on Bringing Order to the Chaos of Legal Data (TGIR Ep. 205)

Dentons Nextlaw LabsMaya Markovich understands that rational lawyers would observe market dynamics and client pressures to weigh the costs and benefits of adapting their behaviors to survive change, stay employed, and make their work more fulfilling. But, people don’t always make rational decisions. And, law firm’s economic structure incentivizes lower efficiency as a method of obtaining higher revenue. 
Wordrake‘s Ivy Grey thinks that firms need to stop thinking of short-term gains at the expense of necessary long-term changes that will help lawyers create more value with their time. This shift really helps clients with their overall legal needs, not just the immediate need.
Join us as we walk through issues of change management, behavioral science, ethical fading, and legal industry business models and where Markovich and Grey believe the industry is headed in the not too distant future.
Check out Maya and Ivy’s three-part blog series:

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Information Inspirations
It’s the legal innovation’s Oscars time of the year. Many of our friends and colleagues have made the list of this year’s Fastcase50 and College of Law Practice Management Fellowships. Congrats to them all!!
Legal Innovators have some habits they need to change. Victoria Hudgins addresses those in her article on CIOs Reveal 4 Mistakes Every Law Firm Innovation Leader Should Avoid.
Speaking of bad habits, Zack Needles discusses the very bad habit of law firms who want to bring in the hot new CINOs (Chief Innovation Officers) to help advance innovation within their firms, but cannot see past the yearly budget, revenues, and profits to let the innovators try things that may fail before they succeed. Needles worries that this will cause a revolving door for CINOs with little chance of being given enough room to actually bring about innovative change in the firms.
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Please take the time to rate and review us on Apple Podcast. Contact us anytime by tweeting us at @gebauerm or @glambert. Or, you can call The Geek in Review hotline at 713-487-7270 and leave us a message. You can email us at geekinreviewpodcast@gmail.com. As always, the great music you hear on the podcast is from Jerry David DeCicca.
Transcript

Continue Reading The Geek in Review Ep. 124 – Maya Markovich and Ivy Grey on Creating More Value with the Time You Have

Last night (April 13th, 2021) I had the privilege of being on the “stage” for a Clubhouse discussion around the Billable Hour. Is it alive and well? Yes. It is COVID resistant. Is it ever going to change?  Hopefully! What do in house counsel think about the billable hour? Some hate it, some

Image [cc] – Tomozaurus

Jane: The billable hour is dead, Dan. It is the sad and lonely remnant of an era when clients were to stupid to realize they were being fleeced by outside counsel. I for one can no longer, in good conscience, blatantly steal my client’s money. I officially declare the billable hour