Median Billing Rates Increased in 2012December 31, 2012 – In The News
The National Law Journal, an ALM affiliate of the Daily Business Review, sampled 55 law firms from among the NLJ 350 – a survey of the nation’s largest law firms by headcount – about the prices their lawyers are charging clients by the hour. The responding firms ranged in size from 128 to 3,746.
The median billing rate in 2012 was $432 while the highest came in at $1,285 and the lowest at $130.
While some clients are digging deeper into their pockets and paying the increased amounts, many others drive harder bargains by demanding discounts and alternative fee arrangements.
“Since the recession, clients have been vocal and effective,” said Mark Silow, managing partner of Philadelphia-based Fox Rothschild. The median hourly rate at his firm in 2012 was $435, a number close to the $432 median in The National Law Journal survey. Silow said the rates at his firm are “highly competitive.”
Fox Rothschild attorneys receive significant pushback from clients when it’s time for rate increases, Silow said, but the clients aren’t “scientific” about indentifying where, exactly, to trim expenses. “They kind of take a shotgun approach,” he said.
Not surprisingly, the biggest firms in the biggest markets generally have the highest rates. By contrast, firms based in smaller markets have median rates below $400 per hour.
Wherever the attorney is based, determining how much he or she can charge is a bit of a group effort, said Silow of Fox Rothschild. Each year, he meets with the firm’s chief financial officer and reviews the partners’ collection efforts. If they’re pulling in the vast majority of what they’re charging, it’s a sign that those attorneys can boost their rates. If collections are lower, there may be less capacity to increase them, he said.
And in almost every practice area among top law firms, there are attorneys who can consistently bill at high rates and who collect on those numbers, Silow said. “There are lawyers who are just that good,” he said.