Billing rates going up

December 2, 2009
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Clients are going to have to pony up a little more cash next year for their lawyers. According to an Altman Weil survey on 2010 billing rates, only about 10 percent of firms surveyed plan to maintain their current billing rates or decrease rates. The average rate increase is projected to be about 3.2 percent.

Many of the firms said they felt pressure from clients to not raise rates, but felt it was necessary because they froze rates in the past few years. Some also said the move toward alternative fee arrangements makes the hourly rate increases “increasingly irrelevant.” A few firms noted the increases they’ll make aren’t nearly as much as they had in previous years.

Some firms will pass along the higher rates only to new clients or in certain practice areas. Associate billing rates will be the mostly likely to see the increase, and a higher rate increase to boot.

“Many firms feel the need to cover their associate costs with rate increases,” said Altman Weil principal Tom Clay. “And because associate rates are lower, increases there may attract less comment from clients than increases at the partner level.”

The AW survey includes comment from respondents regarding why they are or aren’t raising rates. Some interesting ones:

- “Firms need to push back on the clients' unreasonable demands to hold rates at 2008 levels and give a 15% discount off of those rates.”

- “We froze our rates moving from 2008 into 2009. I hear managing partners speaking of freezing rates moving into 2010. We can't sit out two years without changing, so we are going to do so, hoping that client goodwill from last year will cushion us at this year's hike.”

- “We don't even try to raise rates every year. The greedy SOBs that do have antagonized the entire industry to those of us who only seek to raise rates when economically necessary (and PPP isn't economic necessity).”

What’s your firm’s strategy in terms of billing rates for next year? Is increasing rates a better alternative than cutting attorneys for firms looking to find more cash?
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  1. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  2. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  3. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

  4. The sad thing is that no fish were thrown overboard The "greenhorn" who had never fished before those 5 days was interrogated for over 4 hours by 5 officers until his statement was illicited, "I don't want to go to prison....." The truth is that these fish were measured frozen off shore and thawed on shore. The FWC (state) officer did not know fish shrink, so the only reason that these fish could be bigger was a swap. There is no difference between a 19 1/2 fish or 19 3/4 fish, short fish is short fish, the ticket was written. In addition the FWC officer testified at trial, he does not measure fish in accordance with federal law. There was a document prepared by the FWC expert that said yes, fish shrink and if these had been measured correctly they averaged over 20 inches (offshore frozen). This was a smoke and mirror prosecution.

  5. I love this, Dave! Many congrats to you! We've come a long way from studying for the bar together! :)

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