NOTE: CLICK HERE for an expanded look at the findings of the rate report.
Someone has been going through your time sheets. Yours, and a lot of other lawyers. Time sheets prepared by 90,000 people at more than 3,500 firms between 2007 and 2009. Time sheets that record more than $4 billion in billable time. The investigators are the Corporate Executive Board and CT TyMetrix, a company that is paid, among other things, to audit your bills. They have all that data and a roomful of software engineers who write programs to analyze it all and permission from 36 large corporate clients to issue a report on what they call the “real rates.” The American Lawyer got an early look.
-No Volume Discount
Think twice about trimming your pool of approved legal providers. Companies that spent up to $500,000 at a particular firm paid an average of $255/hour. But those that spent $5–10 million and had leverage and bargaining power . . . paid almost twice as much–$477/hour.
-Undercoating? What’s Undercoating?
Hidden costs, not very well hidden.Associate costs rose 17% between 2007 and 2009. Partner rates rose only9% in the same time period.
-Deflation It Ain’t
18% of lawyers increased their billing rate by more than $100 between 2007 and 2009.
-A Privileged Few
Somewhere in this country, there is a fourth-year regulatory and government associate who bills at nearly $750/hour, and there are two first-year litigation ­associates who bill at nearly $650/hour.
-Maybe There Are Fewer Lawyers
Most things that companies buy cost 40% more than they did ten years ago. An hour of legal time costs 65%more, and the average partner charges about $500/hour.
-When There’s No Work to Do . . .
Raise your rates! M&A lawyers raised their rates 19%, to $560/hour, a bigger increase than in any other practice area.
Rates were up 21% in Dallas, Atlanta, and Richmond, while rates in New York, Chicago, and Los Angeles climbed at the (relatively) slow pace of only 14%.