Category Legal Fees

We have undertaken extensive reviews and rate negotiations for legal services across all lines of business. It is a minefield for analysis as there are multiple data points which requires detailed exploration to be usable.


Hourly rates compared

Starting with the basics – comparing different firms rates by fee hierarchy. This is done by lines of business and then separated out into different offices, namely London and then regional.

As can be seen there is a wide difference in rates by firms. And all firms offer markedly cheaper rates in regional hubs compared to London offices.

We have extensive rates for comparison, although at this stage it is not possible to provide meaningful insights without further data analysis.

Comparing fees in more detail

To get towards having a meaningful data set for comparison purposes, we first need to see where each firms fee distribution is.

As is evident in the data set, there is a marked difference between firms of which fee hierarchy is the most prevalent. Firm F is very heavily weighed towards the top 3 earners (Senior Partner, Partner and Director). Firms B and E are more weighted to the associate bandings.

This makes a big difference to the overall weighted fee per hour when comparing firms.

To obtain a true picture of the average fee per hour by firm, we undertake this process for both the London and Regional offices. We then apply a weighting to the usage of these offices, and arrive at a final blended rate per hour.

Fee type by Line of Business

Hourly rates will vary by the Line of Business the matter will relate to. We compare all rates from an insurers panel, applying the blended average. By doing this we are able to compare true costs per hour across any panel firm.

Once we have collated the cost data we are able to immediately see the disparity in costs by firms. For example, on Property matters, is Firm J really worth the extra uplift on costs compared to Firms E and B? Often the answer is yes so the next stage is to quantify why that is.

In most cases though, the general feedback is that the panel firms are, to a lesser or greater degree, equal. In which case we adopt a two tier approach:

  • Outline the discrepancy with the least cost effective firms and work with them to make their offering most cost effective.
  • Re-allocate instructions to achieve savings if the expensive firms will not or cannot seek to be more cost efficient.

Market Comparisons

Comparing existing legal providers is a highly effective way to reduce costs within the panel. However, you don’t know how cost effective the panel is compared to the wider market.

We have thousands of data points collected as a wider industry benchmarking. As such we are able to provide an insight into how your cost base compares to the wider market.

Whilst Firms A through E are all billing an average hourly fee below the market average, Firms F through H are comparatively high. Firm H is approaching the top rate found in the market.

We have run multiple legal panel assessments for insurer clients and can ensure that you are getting the best value. Our expertise also extends to legal fee matter management systems to drive further insights and savings.