Despite the recent surge in billing rates, Big Law firms have been witnessing a gradual decline in overall realization, which was notably higher in the early days of the pandemic. Originally, this decline was ascribed to an increase in client pushback, as well as the shift of focus onto office-return procedures after the pandemic. However, a fresh analysis indicates that a significant part of the drop-off is in fact attributable to ‘self-inflicted damage’ inflicted by law firms themselves, even before invoicing the client.
This form of self-damage transpires after clients have already agreed to a price but before the firms have issued the bill. Interestingly, this suggests that law firms are somehow hampering their own prospects, leading to a diminished realization rate. The decline in realization is even documented to occur prior to client-billing, according to legal analysts who offered a comprehensive overview in their recent report.
For an in-depth look at this emerging challenge and more on the analysis, please see the detailed report, “Self-Inflicted Damage Becomes Driving Factor in Falling Law Firm Realization“.