Tuesday, December 11, 2007

Law Firm Billing Rates Up Over 7 percent in 2007



A National Law Journal survey reported in an article posted on law.com here found that average law firm billing rates rose an average of 7.7% compared to the data reported a year ago, increasing to $348 an hour on average, compared to $321 in 2006. Firms increased their use of alternative billing methods, such as flat fees, contingency fees, and hybrid fees.


The increasing fees may lead to continuing increases in alternative billing arrangements, and may lead to an increase in matters handled in-house, along with an increase in business for small firms whose lower overhead costs allow them to keep billing costs down.


A side effect of the increasing billing rates, according to a recent article by William Gwire in The Recorder, is that clients are more likely to sue firms for malpractice. He states that "[c]lient loyalty seems to have an inverse relationship to a firm's billing rates." Gwire also reports an increase in malpractice cases in which rainmakers commit malpractice because they take on more cases than they can handle, and inadequately supervise more junior attorneys. See here for commentary on the Gwire article.

 

The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies


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