Times are tough. With the economic struggle that was the American economy for the past couple of years, professionals were getting creative in their attempts to recoup the losses. Well, maybe creative is the wrong word, but a recent study conducted by Real Rate Report that analyzed over $4.1 billion in invoices from 3,500 law firms found an interesting conclusion: 75% of attorneys increased their fees during the bad economy.
According to Marketwatch, lawyer location, firm size, experience level, partner status, and practice area were the main factors affecting the lawyer billing rates. Associates, and not partners, were the attorneys that showed the largest increase in billing rates -- with a 16.6% overall increase. Associate attorneys working less that three years had the highest increase across the board with a 17.9% raise in hourly rates.
Interestingly enough, it was the law firm location and size rather than expertise that played a larger role in influencing the rate hike. Another noteworthy conclusion from the report found that larger cities (New York, D.C., Chicago) saw bigger increases in their law firm billing as compared to smaller and mid-size cities.
Like most industries, the recession put a lot of pressure on attorneys to meet their clients needs in a prudent manner, or lose the much-needed business. The fact that there was an increase in legal fees did not change the attorney client dynamic, as the client still has to agree to the increased lawyer billing structure. The fact that so many attorneys increased their fees during 2007-2009 is more an indication of the overall need to recover from decreased business than anything else. It will be interesting to see the role the increased stability in the market will play on fees in the upcoming years.
- New Report Finds 75% of Lawyers Increased Their Fees During The Recession (Law Advice)
- Attorneys' Fees: The Basics (FindLaw)
- Prince Being Sued By Attorney For Unpaid Fees (FindLaw's Celebrity Justice)