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Major law firms, including Gibson Dunn, Baker McKenzie, ArentFox Schiff, and Dorsey & Whitney, have filed a series of lawsuits and arbitration claims in New York, aiming to recover unpaid legal fees from former clients, with amounts ranging from hundreds of thousands to over $2m. These collection efforts coincide with the fourth-quarter push to meet year-end financial targets and partner compensation goals. Legal experts highlight that pursuing unpaid fees through litigation has become more routine in recent years, as law firms face increasing pressure to collect revenue before the close of the fiscal year. The diminishing stigma around filing claims against clients and the significant sums at stake have encouraged firms to take a more aggressive stance in recovering overdue fees. Additionally, rising operational costs and competitive lateral hiring have added to the urgency for law firms to pursue collection actions, particularly as partner compensation is often closely tied to billed revenue.
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