As reported in a couple of articles in the August 2011 California Lawyer, we see how the recent economic downturn has affected fee arrangements and law firm employment in California.
Looks like nonhourly billing arrangements are on the increase in California. Nonhourly fee arrangements have increased by a percentage of 43% of all California firms in 2010, compared with an overall firm nationwide increase of 58%. What about the profitability of these arrangements? Mixed results. For firms proactively offering nonhourly arrangement flexibility, more than 70% said the approach was at least as profitable as hourly billing. However, for firms capitulating to client requests for nonhourly arrangement flexibility, 38% said the the requests were as profitable whereas 42% said they were less profitable.
Now, that brings us to employment and compensation trends for relatively young California lawyers. Midsized firms (35-75 lawyers) increased salaries “somewhat” since the economic downturn. However, the top pay for attorneys at top law firms mostly “wobbled” (the article’s characterization, not ours). In yet another twist, most of the attorney hiring is made by small firms, particularly with attorneys having less than seven years of experience.