As 2026 kicked off, Louisiana-based law firm McGlinchey Stafford announced it was closing its doors, as of Jan. 31, after 51 years in business. Since then, news reports have largely focused on where the firm’s attorneys have ended up. There are fewer articles diving into what led to the firm’s announcement it will wind down its operations, but some, such as this article from Law.com, cite a combination of notable recent departures as well as larger market forces.
For its part, McGlinchey says there was no single triggering event. In McGlinchey’s statement, Managing Member Michael Ferachi says, “This is not because of any specific attorney’s departure, or any individual financial decision or leadership action that led us to this point. This is the result of a combination of market factors, such as lagging collections, compounded with various internal factors over several years.”
Amid the vague reasons in that statement—such as “market factors” and “internal factors”—was one specific factor: lagging collections.
CLM has tracked this issue over the years in its Defense Counsel Study, and the takeaway over time is that the problem has been an increasing source of pain for defense firms. CLM’s 2024 Defense Counsel Study notes, “What we do know is that the pain of payment duration (i.e., waiting for payment) has gone up when compared to 2020 results. For non-associates, it is 32% more painful; for all attorneys, it is 20% more painful. It appears to hurt a lot more now than it did four years ago. It is certainly not getting better.”
Asked to rate the issue on a scale of one to 10 in the Defense Counsel Study, the mean “pain” score among respondents in 2020 was 5.6, and the median score was 5.3. In the 2024 Defense Counsel Study, the mean score rose to 6.7, while the median score rose to seven out of 10.
Snapshot Survey
More recently, CLM conducted an informal, online “snapshot survey” of its members in January to gauge where that pain score is today and what it might mean in practical terms. In other words, with McGlinchey citing this issue as one of the reasons it is shutting its doors, do other insurance defense firms feel this kind of pressure on their own operations?
Nearly 53% of respondents say the timing of legal invoice payments related to insurance defense work has become longer over the past three years. Nearly 65% of respondents say their average accounts receivable duration is 60 days or more, with nearly 9% saying it is 91 days or more. As for a pain score, the median response was seven out of 10, while the mean score was about 5.9.
Over 73% of respondents to the snapshot survey indicated that they have considered exiting the insurance defense practice (either “occasionally” or “with increasing frequency”) because of the timing of payments.
CLM reached out to some members to see if the snapshot survey results align with their experiences. Regarding the number of respondents who have considered exiting the practice, JD Keister, attorney, McAngus Goudelock & Courie (MCG) Law, says, “While…73%...is higher than what I would expect and hear on this specific issue, I do know that many lawyers or even firms are facing such significant cash flow issues that it is leading to an all-time [high] frustration level. He adds, “From my discussions, I think this is an even bigger pain point with smaller and mid-size firms who are facing daunting pressures to stay in the industry.”
Donna Markus, chief operating officer, The Kopka Law Group, adds that although her firm has not considered exiting, “diversifying our practice areas has been strongly considered so the impact is minimized.” Markus agreed with the pain scale score in the snapshot survey, noting, “The combination of quarterly billing on top of average days to pay after invoicing is painful. Our firm average is 50 days to [receive payment] (from our top 120 clients) after invoicing. Waiting three months to invoice many of our clients and another six to seven weeks thereafter to get paid is very painful.”
She adds, “Our employees are paid twice a month, [and] our expenses are monthly. When we hire a new attorney, we have to pay them right away but need to wait almost 18 weeks to see any cash revenue from their employment,” Markus says. “We are a business with cash needs. The most important element of running a firm is cash. Delaying payments hurts our operations.”
Another CLM member offered, “From bill to paid, it’s more than 90 days for our firm. From billing by attorneys (meaning entering billing into the system) to…[final] payment is often 180 days or more.”
That member stated the pain scale rating would be a nine for them, stating, “The demands upon defense counsel are suffocating,” they explain. “What is expected of defense counsel is unreasonable. Adding insult to injury is that we do not get paid for the value of our work, sacrifice, or commitment to achieving results for carriers and insureds. Not only are our bills improperly reduced, but we are expected to be financial lenders with fronting fees that should be carrier responsibilities.
“In no other industry are people expected to work this long and hard and then have their clients decide after the fact that they are not going to be paid for all that work based on some arbitrary standard of what is billable and what is not billable...The industry is facing a major crisis, as it does not adequately reward the hard work of counsel.”
Keister notes that the snapshot survey results convey the “frustrations that firms are feeling about the billing process overall, which has become a significant barrier for many firms.” He adds, “These obstacles are not just administrative headaches; they can significantly impact a firm’s cash flow, profitability, and…morale….”
Keister concludes, “I think the overall desire of the industry is to focus on the joint defense of these claims and not expend so much energy and frustration on the billing process. Solutions do exist if the parties work together.”