Page 37 - Strategic Planning for Law Firms

Strategic Planning for Law Firms
Insurance Defense Firms
The traditional insurance defense firm represents one or more insurers and handles their insurance defense or insurance coverage work (or both).
They typically handle a large volume of matters from each carrier, in exchange
for discounted rates and reduced fees. Insurance defense firms tend to generate less revenue per attorney due to lower hourly rates, but due to quantity of cases, they
tend to employ more attorneys, including more associates, and they bill more hours per attorney, making up (at least in part) for the lower rates they charge. Even though the margins, per attorney, are less than a
commercial firm, in the aggregate, they can be quite profitable. An insurance defense firm, that properly uses data and analytics, and has litigation and trial processes in place, can resolve matters quickly and efficiently, reducing legal spend to their clients, resulting in even more referrals. It’s not uncommon to visit an insurance defense website and have them tout how quickly they close cases, from start to finish. It is a tried and true model, and has served as a training ground for many defense trial lawyers. The key in Insurance Firms is to keep overhead low so that a margin of profit can be obtained from lower rates.
Commercial Litigation Firms
Commercial litigation firms, typically, handle fewer, more complex matters, at higher hourly rates. Some have institutional clients which they represent in breach of contract, intellectual property, bankruptcy, classactions,employment,etc. Thesefirms tend to have more clients and less repeat business due to the nature of their work. They also represent self-insureds in product liability, drug and medical device and other high end litigation, which sometimes can
bet the company lawsuits. Because of the nature of their practice, the rainmakers at these firms have large national networks, though it is not uncommon for some of them to draw a lot of their work locally, requiring lesstravelandexpensetobringinmatters through the door. They tend to bill fewer hours and spend more time developing business.
©2021 Federation of Defense & Corporate Counsel
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SECTION 06 FIRM MODELS