Some boutique firms plan to see a windfall in increased profitability by providing economical alternatives to the higher billing rates expected to result from associate salary hikes. “The associate salary raises will lead to huge increases in rates charged for those associates and junior partners,” says Mike Lynn, a partner in Dallas’ Lynn, Stodghill, Melseimer & Tillotson. “We woke up one day and almost all of our competition in the state have priced themselves out of Texas. They can no longer provide reasonable rates for their clients. It’s becoming a relative bonanza for boutique firms as clients move from the largest firms in Texas to us.”

Most large Texas firms have not announced rate hikes as a result of associate salary hikes. Firms like New York’s Skadden, Arps, Slate, Meagher & Flom and Houston’s Vinson & Elkins say they typically review and raise rates once a year.

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