Some of the nation's largest firms are coming for their unpaid legal fees. According to Law.com, Gibson, Dunn & Crutcher; Baker McKenzie; ArentFox Schiff; and Dorsey & Whitney were all in New York court suing clients who have failed to pay their legal fees. The efforts are likely in pursuit of fourth-quarter revenue goals, Law.com adds.

"At the end of the year, like most businesses, Am Law 100 firms are starting to look at their numbers…Some of those firms, their partner compensation is not just based on revenue received, it's also based on revenue billed," Cliff Robert, of New York firm Robert & Robert, said.

Meanwhile, Robert Barrer of Barclay Damon, added that "the question of when the suit would be filed is very dependent on the amount and the prospects of success with the client...The larger the amount due in fees, the more likely a suit will be filed. … If the client has no money or is on the verge of bankruptcy, the less likely you are to collect those fees."

As for the breakdown of the cases, Gibson Dunn is in arbitration with a major New York landlord seeking just shy of $2 million  for services between January 2022 and April 2024. Baker McKenzie is suing a pharmaceutical company for over $280,000 in unpaid fees. ArentFox is suing an insurance firm for $2.15 million in unpaid fees plus interest. Dorsey & Whitney is suing a client for nearly half-a-million in unpaid fees.

A Banner Year

According to a survey by Citibank's law group, strong revenue and growth from the first half of 2024, point to a banner year for Big Law. "Revenue rose an average 11.4% for all operations compared with the same period last year," Bloomberg Law notes of Q1 and Q2. "The figures represent the best first half since the surging legal market of 2021, when revenue grew 14.6% and demand for the top 50 firms grew 9.4%."

Verdict

While booming demand for Big Law firms and subsequent revenue is a welcomed relief from a few slow years over the pandemic, the increase in litigation against clients and the sky-high rates of top firms is growing unsustainable for many clients. To mitigate this, legal departments should consider using alternative service providers like Lawtrades.