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Do law firms raise their rates no matter what? It sure looks like it. Despite last year’s stagnant economy, hourly billing rates still inched up in 2003, according to a recent survey. In its latest poll of the largest firms in the country, The National Law Journal asked firms to list the high and low hourly rates for their partners and associates. Last fall the publication sent questionnaires to about 300 firms. Of those, 134 supplied information on their billing rates. A look at billing data from the 114 firms that also responded to the 2002 survey shows that all but three increased their rates in at least one category last year. In some cases, however, a jump in the lowest rates for associates or partners was accompanied by a drop in the higher rates. Seven firms cut their top partner rate while 26 clipped their top associate rate. But in many cases these decreases went hand in hand with increases in lower rates for partners or associates. These characterizations come with a caveat, of course, since only a minority of the surveyed firms volunteered their billing information. Large firms were especially reluctant to report their rates — only seven of the 25 biggest firms did so. But by looking at bankruptcy court filings, The National Law Journal was able to obtain billing data on the rest of the Top 25. Because companies in bankruptcy operate with a judge and trustee looking over their shoulder, they’re generally required to declare the billing rates of the attorneys they propose to hire. The fact that rates rose at most firms doesn’t surprise Ward Bower, a principal at the legal consulting firm of Altman Weil, Inc. “Law firms have learned that they’ve got to increase rates annually to stay ahead of inflation because if you wait and make a big jump all at once, the clients really squawk,” he says. Since 1984 Altman Weil has tracked the increase in rates for senior partners (25 to 29 years in practice) and senior associates (five years in practice), and has plotted them against inflation as measured by the Consumer Price Index. If 1984 rates had just kept pace with inflation, they would be 70 percent higher in 2003, according to Altman Weil. In fact, senior partner rates rose by 114 percent; senior associate rates increased by 130 percent. Of course, what a firm asks for and what it gets are two different things. “More and more clients are demanding discounts,” says Bower. “You have to get your base rates up there if you’re still going to make a profit after discounts.” Gary Young is a reporter for The National Law Journal , an American Lawyer Media publication that is affiliated with In-House California .

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