Pepe & Hazard announced a billing rate freeze throughout 2009 for existing clients.

The Hartford, Conn.-based firm of about 60 lawyers specializes in construction, including international arbitration disputes for construction companies, business law, financial services and general litigation. The regional firm also has offices in Boston and Fairfield and Waterbury, Conn. The firm instituted the rate freeze to "shoulder some of the burden" the current economic climate has imposed on businesses, said managing partner Al Turco.

"We are committed to working with our clients to get through this difficult time," said Turco.

Several legal consultants said they're not aware of other firms instituting a similar sweeping policy.

An across-the-board rate freeze is "a mistake most firms learned not to make in the last recession," said Peter Zeughauser of the Zeughauser Group, a legal consulting firm in Newport Beach, Calif.

"A rate increase missed is a rate increase lost forever," Zeughauser said. "You never get the money back and you lose ground to the competition if everyone else is raising rates. It's all about profits."

Top U.S. and global law firms are raising 2009 billing rates by about 3% to 5% in 2009, compared with 5% to 8% for the last several years, Zeughauser said.

Zeughauser said those rate increases are occurring at U.S. law firms in the Am Law 200 and the Global 100 — listings of law firms ranked by revenue that are published, respectively, by the American Lawyer and Legal Week, both affiliates of The National Law Journal .

Turco said he's not worried about missing out on higher rates next year or the next business cycle.

"What's more important is working with the clients we have today and in a way that's relevant to their real business problems," Turco said. "To sort of hesitate and think what this may mean two years down the road would be short sighted."

Pepe & Hazard's billing rates for partners range from the low $300s per hour for "newly minted partners" to a top rate of about $550 per hour, Turco said. The firm's partners generally charge about $400 to $420 per hour, he said.

"We think we deliver good value in the first place," Turco said. "In the areas we cover, typically on the other side we find a big city law firm." Of the firms raising rates in 2009, many are simultaneously giving clients an across-the-board discount of 10% to 15% on legal services, said Susan Saltonstall Duncan, president of Old Lyme, Conn.-based law firm consulting company Rainmaking Oasis Inc.

"Freezing billing rates is one way to look at cost containment," Duncan said. "I think [firms will] look at more expansive ways."

Although committing to a year-long rate freeze is rare, firms are responding to the Association of Corporate Counsel's "value challenge" rolled out in September, Duncan said.

The challenge prompts law firms and in-house counsel to discuss so-called "value-based alternatives" to the billable hour. The association plans to review corporate outside legal fees for a year to ascertain whether billable hour alternatives are becoming more accepted in the wake of the program. [Related article, "Billing gets creative in souring economy."]

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