Some clients of several major international law firms are asking for discounts or payment plans as they struggle with rising costs and higher interest rates, the Financial Times reported.

A client of one U.S. firm asked for a discount “for the first time in years,” according to the head of the firm, who added that the firm is “not getting paid by some clients,” especially technology companies.

The tech sector has been hit especially hard by rising interest rates and has dumped tens of thousands of workers in recent months.

Some clients are asking for flat fees for services instead of being billed by the hour, an attorney with another firm said to the FT.

“We had a number of clients who said, ‘I’m not going to pay you all that now, I’ll do it over a different time frame’,” Tamara Box, a regional managing partner of the firm Reed Smith, told the FT. “It started in the third or fourth quarter of last year.”

Clients “were looking toward 2023 and thinking things were coming together in a way that looked bad—a war, rising inflation, and rising interest rates,” she added.

In addition to cutting back legal services or asking for discounts or time payments, some companies are pulling more legal work in-house, the FT noted.

Average hours worked per lawyer at major international firms slumped to 119 per month, according to a Thomson Reuters survey, the lowest since 2007 when the survey began logging attorneys’ hours. In that year, lawyers booked an average of 134 hours monthly.

Hogan Lovells, another large international firm, said revenue was down 6.7 percent by the end of 2022 and partners’ share of profits dropped an average of 8.2 percent.

Clients’ increase in requests for better terms follows a year in which most firms raised their hourly rates to cope with inflation, the FT pointed out.

TREND FORECAST: We note this article to illustrate the depth and width of the global economic contraction… from top to bottom. Again, the higher interest rates rise, the lower the phony propped economies will decline and the more businesses will go out of business.

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