by Brian Mahany
[Ed. Note: This post appeared on our sister law practice management blog, Guerilla Law Firm Blog. Check it out and visit often for stories examining the high cost of legal services, the trend away from traditional law firm models and the future of law.]
The National Law Journal conducts a yearly survey of attorney billing rates. For the 2012 annual survey, the NLJ sampled 55 of the largest law firms in the United States. The results were disappointing.
While American businesses struggle and are just beginning to see real signs of recovery, the caviar and champagne continues to flow freely at “BigLaw.”
Between 2011 and 2012, the median hourly billing rate for the large firms increased from $410 to $432. The median partner rate also increased slightly, now up to a mere $517 per hour. With some partners routinely billing at $1000 or more, it amazes us that businesses continue to pay these rates.
We were amused to see the median associate rate – typically lawyers with 7 years or less experience – is just about at our partner rate of $350. (According to data from the American Bar Association, tax partners – our nearest competitors – charge on average over $600 per hour.)
For years, the nations top 100 firms typically set the standard for billing rates. That may soon be changing, however. As business clients demand greater accountability, we believe the large law firm model will soon fail. Boutiques and virtual law firms can now offer the same or better service and at half the cost.
Our firm, for example, can maintain partner rates consistently below the national averages by eliminating overhead and unprofitable business areas. We are full service but don’t try to offer every service. We look for the best lawyers and keep them where they are located and use technology to build our firm and connect our teams.
Like what you are reading? Our Guerilla Law Firm Blog is new and welcomes submissions from businesses and lawyers. We hope to use these pages to explore the high cost of legal services, the end of traditional law firm models and fees and discuss the future of law. Even are competitors are welcome to post. Wish to remain anonymous; just tell us when you are writing and we will honor your wishes.
Think about joining our LinkedIn group Virtual Law as well. It’s brand new as well. We hope to offer a forum for virtual boutiques and clients to exchange ideas and find answers to their questions.
Mahany & Ertl – America’s Tax & Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Services available in many jurisdictions.