Isn’t it Time for a Change?

In a preliminary review of the 2010 Mattern & Associates, LLC Cost Recovery Survey, the average net realization on billable items (the amount the firm actually gets paid for after internal and client write-offs) is below 50%. In other words, the firm is only getting reimbursed for less than 50% of what they are billing their clients on soft cost items. If you factor in the non-billable amount, this amount decreases to 33%. What does this data tell us? That the traditional method of cost recovery, and support services as we know it in law firms today, is dying.   

As Einstein said about insanity, it is doing the same thing over and over again and expecting different results – isn’t that that what we are doing with cost recovery and the support services?