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It seems a year doesn’t go by without law firms bumping up rates. And this year isn’t any different. Billing rates for law firm attorneys show a steady increase from last year for both partners and associates. This year, 139 firms answered questions on billing rates as part of The National Law Journal‘s 2006 survey of the nation’s 250 largest law firms. The surveys were sent to roughly 300 firms. The firms provided low and high rates for partners and associates. Of these firms, 104 provided low and high rates last year also, with 88 increasing the partner high rate, eight decreasing it and eight keeping it the same. Seventy of these firms increased the partner low rate, 19 decreased it and 15 kept it the same. As for the associates, 73 firms increased the low rate, 15 decreased it and 16 kept it the same. And 77 firms increased the associate high rate, 18 decreased it and nine kept it the same. And for the first time last year, we asked the firms to provide their average and median billing rates for partners and associates, as well as firmwide. Forty-eight firms that provided partner and associate average billing rates last year did so this year. Of those firms, 43 reported higher partner average rates this year, and 44 reported higher associate average rates. Forty firms reported firmwide average rates this year and last. Of those, 37 reported higher averages this year. Forty firms that reported partner and associate median billing rates last year did so this year. Of those firms, 35 reported higher partner median rates this year, and 33 reported higher associate rates. Thirty firms reported firmwide median rates this year and last. Of those, 23 reported higher medians this year.
The numbers Nationwide sampler Associate class rates Alternative methods

The increase is partly due to inflation and supply and demand, said Joseph Altonji of the management consulting firm Hildebrandt International. “It’s the demand for a really good lawyer, and it costs to hire really good people,” he said. “Since these costs are going up, the firms have to pass that cost on.” And for sophisticated transactions, clients are willing to pay, Altonji said. Washington-based McKee Nelson reported this year’s highest rates across the board for partners and associates but the firm declined to comment on its rates. The highest rate billed out by a partner at the firm is $875 an hour, which is low compared to last year’s $1,000 rate billed out by Benjamin Civiletti, who specializes in internal investigations and corporate defense at Venable of Washington. Venable did not participate in the billing survey this year, but last year said the rate was used only for the most “extraordinary work.” The high number this year is still very high compared with most firms, Altonji said. But in big cities like New York, Chicago and Los Angeles, there are definitely still a handful of partners billing out at $1,000 or even slightly more, he said. McKee Nelson also reported the highest rate billed by an associate at $575 an hour, also low compared to last year’s associate high at Dorsey & Whitney, a reported $835. Dorsey reported an associate high of $430 this year. McKee Nelson further reported the highest average and median rates for partners: $725 and $720, respectively. Three firms-Curtis, Mallet-Prevost, Colt & Mosle; Schulte Roth & Zabel; and Thacher Proffitt & Wood-reported partner averages in the $600s. All three are New York-based. It should be noted, however, that many of the largest and highest-billing firms declined to participate in this year’s billing survey. Among the lowest reported partner and associate rates this year were those at Philadelphia-based Marshall, Dennehey, Warner, Coleman & Goggin. Associates bill out at $130 to $275, and partners between $145 and $350. This is still an increase from last year, when associates billed between $130 and $230 and partners, between $140 and $275. “The rates are increasing because we are doing more high-end work in securities and mass tort litigation,” said Thomas Bond, the firm’s senior partner and director of client development and relations. The lower-end numbers at the firms are due to rates for younger lawyers and lawyers who do commodity work, such as in insurance law. “A lot of lawyers are capable of doing that work,” Altonji said. “But over time, it spreads and lawyers who are doing more sophisticated work can raise rates. For the big transactions, rates aren’t going to be an issue and the best lawyers are going to get to do the deal.” Finally, some firms reported on their use of variations on the billable hour, such as discounted rates and blended rates, and on their use of alternative billing methods, such as fixed or flat fees and contingency fees. As in past years, most firms reported higher percentages of revenues obtained from variations than from alternative methods.

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