Recently, we were shocked to read an article in the Wall Street Journal titled “Corporate Clients Push Back After Law Firms Hike Starting Salaries,” written by Sara Randazzo. In the article, it explains that law firm Cravath, Swaine & Moore recently announced that it would raise its starting pay for junior-lawyers to $180,000, but many companies have questioned the raises, including Bank of America Corp.’s top lawyer who called the raises ‘unjustified.’ The chief litigation officer for a Fortune 100 company found the salary also unjustified, as they pointed out that an in-house attorney with 20 years of experience does not make $180,000 per year. This same company recently denied a firm’s request to charge $400 per hour on a first-year attorney.
Historically, law firms have had one business model - charging clients by the hour. While this traditional business model worked great for law firms, it has become more and more evident to in house lawyers and business owners that it’s not a well aligned model with their businesses. According to the article, “many in-house lawyers grumbled about the arrangements, saying they encouraged inefficiency and led to eye-popping bills.”
In the employment and HR world, employers are faced with day-to-day questions, and laws are that are constantly changing and being added. For the traditional hourly rate law firm, this is great news! More billable hours at higher rates!
At myHRcounsel, we think the hourly business model has run its course for certain areas of the law, those that are more fluid and/or transactional. Today’s businesses have been met with legal compliance issues happening daily. We believe that having a partner for the daily HR questions to stay compliant at our innovative monthly subscription flat-fee price is better aligned with our clients. With the monthly flat fee we are incented to be proactive, get the correct and actionable answer as efficiently as possible – not driving up the hours spent on the question, and thus driving up a client’s monthly legal bill!
By providing our clients with unlimited access to experienced attorneys and access to our online portal stocked with information and forms, all at a one-time monthly flat-fee, it takes out the guesswork for employers who previously had to consider hiring an attorney at an hourly rate of up to $400 per hour! We believe that this business model is a perfect fit for both small, medium and large businesses who no longer want to hire an hourly attorney for daily legal questions (especially a junior associate who makes $180,000 per year!).