2020 Survey of Law Firm Billing Rates
As per survey, legal fees are on the rise. Moreover, a stressed economy is putting more pressure on the margins of law firms. As per August data of the National Statistical Office, India’s GDP growth rate at 5% in the financial year 2020’s 1 st quarter– the slowest rate of growth in the past 6 years. Some of the challenges are decreased consumer demand, unemployment, etc. According to the Ministry of Commerce and Industry, growth in several key industries like coal, steel, cement and natural gas production slowed down from 7.3% in July 2018 to 2.1% in the same month in 2019. On the other hand, heavy monsoon rains worsen agricultural yields, delaying harvests as well as shrinking supplies. The extreme hike in the price of onions has led to an unexpected ban on exports for regulating costs locally. This has cast its impact on law firms as well. According to an imminent lawyer of India, clients are now reluctant to spend much on legal fees due to worst economic situation in the country. Besides, another reason is the increased constraint on fees due to the increased competition from more number of law firms, as well as from larger in-house teams. However, a slight pressure is healthy as they do away with all kinds of inefficiencies at law firms, but most of the pressure is adverse. These force even the larger firms to offer unrealistic discounts that inevitably lead to dilution of quality.