At the recent Legal Operators’ Feast & Forum NYC Roundtable, I had the opportunity to engage with legal operations professionals who are tackling the twin challenges of cost control and value maximization in a shifting industry. Rising legal fees, increasingly complex business issues, and a growing emphasis on innovative service delivery models are reshaping how we approach our work in corporate legal and claims departments. These challenges and the strategies to address them set the stage for our discussions during the event.
Cost pressures emerged as a particularly urgent concern. According to the 2024 Future Ready Lawyers Survey from Wolters Kluwer, cost and price pressures rank among the top five challenges facing the legal industry over the next three years. Similarly, the 17th Annual Law Department Operations Survey by the Blickstein Group found that 52% of respondents identified cost containment as their top challenge for 2025.
The data we shared with participants further highlighted the scope of the issue:
- Our 2024 Real Rate Report revealed that average rate increases occurred across nearly all industries, with consumer services experiencing an 11% jump.
- Within Am Law top 50 firms, the average rate increase for all timekeepers was 7.1%, followed by an increase of 5.7% for those within Am Law 151-200 firms.
- In key markets like New York City, San Jose, Chicago, and Washington, D.C., partner rates now average over $1,000 per hour.
- Associate rates in industries such as healthcare, technology, and consumer services saw increases between 9.6 and 11.1%.
For legal operations teams, these rising costs emphasize the need for robust strategies to control spend without sacrificing quality or collaboration.
Seeking law firm innovation
Balancing cost control with maintaining strong relationships with outside counsel is a critical challenge for legal departments. While relationships with law firms remain essential, the focus on innovation and data-driven decision-making is growing.
According to the Blickstein Group LDO Survey, there is a clear disconnect:
- 96% of respondents want law firms to propose new delivery models.
- 69% believe pricing professionals can drive service delivery innovation.
- However, only 12% primarily engage with pricing professionals, while 85% primarily work through relationship partners.
This disconnect highlights a significant opportunity: legal departments can expand their engagement strategies to include pricing professionals who can deliver creative solutions aligned with cost containment goals. Additionally, only 25% of legal departments share law firm evaluation metrics, and just 22% share internal performance metrics. This limited transparency can hinder progress in optimizing relationships and achieving cost predictability.
How to make progress
To address these challenges and make meaningful progress, I shared the following recommendations with attendees:
- Schedule consistent business reviews: Regularly meet with relationship partners and other key stakeholders to review business objectives, performance metrics, and opportunities for innovation. These reviews create a foundation for ongoing alignment and trust.
- Foster transparent communication: Share both law firm performance metrics and internal legal department metrics openly. This transparency drives accountability and ensures that all parties are working toward common goals.
- Engage pricing professionals early: Bring pricing professionals into the conversation earlier and more frequently. Ensure they understand your key objectives and collaborate with them to develop innovative pricing models that align with your cost control strategies.
By adopting these practices, legal departments can enhance their ability to control costs, improve predictability, and drive innovation in partnership with their law firms.
One of the highlights of the Feast & Forum NYC event was open discussions in which legal operations professionals shared their experiences and strategies for navigating the competing pressures they are under. My next blog will feature some of the key takeaways from these peer-driven conversations.