If you're still working with large law firms, you have to read this article on Bloomberg BNA.
Fannie Mae GC: The Law Firm Profit Structure Is Broken
The article is an interview with the General Counsel of Fannie Mae, Brian Brooks. General Counsels and major businesses like Fannie Mae know how to buy legal services, and they have great leverage with their law firms.
Here are two excerpts to give you a feel for how sophisticated consumers of legals services think and act:
"First of all, as associate rates have gone up, what have companies done in response? What
they’ve done is say to their law firms, “We will not pay for first-year or second-year associates at all.”"
"The second irony is: people think law firms make money on the billable hour, but when you sit down with the business consultants of the world, and you really delve into the numbers, you find out they don’t make money on the billable hour. They make money on leverage."
Click on the link above to read the full article.