Firms Hesitant to Up Rates ‘Might Be Leaving a Little Bit of Money on the Table’
Irwin Kishner, Executive Chairman at Herrick, was featured in an article in The Mid-Market Report discussing the resistance to rate increases in the legal market during the pandemic. The article noted that Herrick "has seen 'healthy demand' in the middle-market sector in a variety of areas so far in 2021, but rate resistance remains constant."
"There is always rate resistance in what we do," Kishner said. "You need to justify the value, and there has to be a fair trade in value. And that's what we do." He further explained that Herrick seeks to position itself below standard increases in the legal market.
This year, the firm raised billing rates less than prior years noting that, "[w]e just have the be very aware of the outside world."
The article notes that one of Herrick's main client sectors is the real estate industry, which "continues to experience the effects of remote work and the pandemic." Kishner recognized that "the [real estate] market is very hot, but there are certain business segments that have not fully recovered and we just want to be mindful of that."
Kishner further discussed pricing structure, saying, "There's no question that the transactional side of the house is using pricing functions more routinely and that the sophistication of our budgeting and reporting is more advanced on the transactional side. Compared with litigation, the nature of transactions contain more of the same issues, sequence and process, allowing more robust data on what it costs to do a particular type of deal."
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