The “real” hourly billing rate for lawyers in Texas is among the highest in the country, exceeded only by the rates in Nevada, Connecticut, Florida and Illinois, according to a new report on national legal trends released this week.
Billing rates in Texas averaged $267 per hour in 2016, and the “real” hourly billing rate, which accounts for the cost of living and therefore reflects actual purchasing power, was $276.
The report breaks down hourly billing rates by state and by city. In Houston, the hourly rate in 2016 came in at $276, while the comparable rate in Dallas was higher at $300, according to the report.
While higher than many, the hourly billing rates in Texas’ two largest cities in 2016 were less than the $344 an hour for lawyers in New York City and the $323 in Los Angeles.
Nevertheless, the hourly billing rate in Dallas was higher than the rate in Houston and three other large U.S. cities identified in the report— Atlanta, Boston and Philadelphia. Houston’s real rate was only higher than the $245 an hour billed in Philadelphia.
The report found that Texas lawyers were much like lawyers elsewhere in the country in terms of how they spend their time. U.S. lawyers spent only 29 percent of their workdays on billable work in 2016. The utilization rate for Texas lawyers came in at 29 percent.
According to a survey of 2,915 U.S. legal professionals, including some Clio customers, lawyers spend only 29 percent of their time on billable hours because they are spending 48 percent of their time on administrative tasks and 33 percent on business development.
The report also found that the realization rate for Texas firms—a rate that measures the percentage of billable hours that are invoiced—is 83 percent, compared with 82 percent nationally. The collection rate, which is the percent of billed work that is paid, is 86 percent in Texas—the same as the national rate.
According to the survey, legal professionals say a big reason why they are not as productive as they would like is that they have frequent interruptions. About 25 percent report that they are interrupted 10 times a day, and 30 percent say they are interrupted between six and 10 times a day.