Biglaw, Billable Hours, Partner Issues, Salary Cuts

Law Firm Billing Rates

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We’ve been extensively chronicling salary cuts for associates. One consistent firm rationale for cutting salaries is that firm clients are no longer willing to pay for junior associates. The consistent counter-argument is that clients don’t care what associates get paid, clients care about what clients are charged.
Unfortunately, there has been precious little information about what law firms are doing to reduce their billing rates. It seems that firms want to get the information out that they are cutting the salaries of their attorneys, but do not wish to discuss what they are charging their clients.
Today, Incisive Legal Intelligence released its 2009 Billing Rates and Practices Survey Report. Unfortunately, you have to pay for it. But here is the top-line summary from the press release:

The average hourly billing rate reported was $284. Nationally, plaintiffs’ contingency litigation is the practice area with the highest average hourly billing rate ($413), followed by labor/employment ($302), general law ($295) and real estate/land use ($294). The billing rate survey data represents a sample of more than 14,000 lawyers throughout the 50 United States, drawn from responses from 255 law firms.

More notes from the report, after the jump.


The report appears to focus on small and midsized firms. It’s based on firms who decided to self report to Incisive Legal Intelligence. Here’s the breakdown of respondents, according to the publication:

* 58% Attorneys from Small Firms (2 – 39 attorneys)
* 32% Solo Practitioners
* 10% Attorneys from Mid-size Firms (40 – 170 attorneys)
* 78% male, 22% female
* Over 80% of respondents have practiced for 10 or more years
* Most were the leader, manager, partner, shareholder, or owner of their firm.

From that data set, there are signs that some firms are passing the associate salary cutting savings on to their clients:

In addition to hourly billing, 88 percent of respondents reported offering alternatives to the billable hour. Larger firms are more likely to offer alternatives and variations to the billable hour than smaller firms. Nearly two-thirds of respondents offer contingency fees or fixed or flat fees.

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Obviously, we need more information. If firms don’t want to be open about their billing rates — and they don’t — perhaps clients themselves will let us know which firms cut salaries in connection with a reduction in billing rates, and which firms do not.
2009 Billing Rates and Practices Survey Report [Incisive Legal Intelligence]
Earlier: Prior ATL coverage of law firm salary cuts

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