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Legal Spend Trends:  Big Law Billing Rates Rising

Legal Spend Trends Big Law Rates Rising-header

A new legal spending trends report finds big law billing rates grew notably – pushing a 6% increase in the gap between the top two tiers of law firms, by attorney headcount, from 38% to 44%.

Median partner rates at the “Largest 50” law firms – those with more than 750 lawyers – rose to $711 per hour, based on 12 months of data ending June 30, 2015.  That number is up from the last report where median partner rates came in at $675 per hour for the 12 months ending December 31, 2014.

In comparison, median partner billing rates among the second tier, or the “Second Largest” law firms – those with between 501-750 attorneys – rose more modestly from $490 for the 12 months ending in December 31, 2014 to just $495 in this most recent analysis.

Legal Spend Trends  Big Law Rates Rising-ending-JUN15

Median partner billing rates by law firm size for the 12 months ending June 30, 2015.

The data is derived from the 5th edition of the CounselLink® Enterprise Legal Management Trends Report. The semiannual publication analyzes a collective stream of $18 billion in legal invoices process through the CounselLink e-billing system.

The analysis and reporting for these trends reports is led by Kris Satkunas, the principal author, who is also the director of Strategic Consulting for the CounselLink team.

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Legal Spend Trends  Big Law Rates Rising-webinarJoin Us for a Complimentary Webinar
2015 Mid-Year Trends Report: 6 Key Metrics Webinar
with Kris Satkunas
October 28, 2015 | 1:00 p.m. (ET)
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Billing Rate Growth Varies by Practice Area

The report which tracks 12 different practice areas also found two in particular have had a consistent track record of rate growth.  The “IP-Patent” and “Regulatory and Compliance” areas of practice “show median partner rate growth above 2.9% during both the past year and over the previous three-year period,” according to the report.

By contrast, median partner rates for the “Insurance” and “Environmental” practice areas are growing at a slower rate than the rest.  The full report also examines growth in law firm billing rates in M&A, litigation, real estate, employment and labor, and commercial and contracts among others.

Legal Spend Trends  Big Law Rates Rising-ending-DEC14

The previous median partner billing rates by law firm size for the 12 months ending December 31, 2014.

Billing Rate Growth by Geography

The legal spend trends in this report also notes that law firm billing rate growth tends to be inconsistent across geographies, although some regions stand out:

“Four cities show rate growth of 3.5% or more both in the short term (1 year) and longer term (3 year CAGR). These cities are: Chicago, San Francisco, Boston, and Philadelphia.”

Likewise there are geographic regions that experienced slower growth in billing rates:

“On the opposite end of the spectrum, five cities had hourly rate growth of less than 2.5% in both metrics. These cities are: Houston, Los Angeles, Miami, Minneapolis, and Phoenix.”

2015 Mid-Year Trends:  Six Key Metrics

The CounselLink ELM Trends report provides broad legal spending benchmarks. The report is published twice a year and examines 12 months of data after the second quarter closes on June 30th – and again after the fourth quarter closes ending December 31st.

While both reports examine six key metrics, the year-end report provides more comprehensive analysis high-level trends.  Unlike survey data, these trends are derived from law firm invoices paid by corporate counsel.  The data is aggregated and anonymized and legal departments using the CounselLink platform are able to obtain benchmarking data in far greater granular detail.

These reports while useful and valuable also tend to be complex. To help corporate legal understand the information – and use it to for managing legal spend – the CounselLink team will host a webinar later in October 2015 to walk through the six key metrics:

To obtain a copy of the report in PDF format, please visit: http://bit.ly/ELM-2015-MidYear

Coverage of previous editions of the report can be found here:

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.
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  2. […] Billing rates surged at the country’s 50 biggest law firms to a median hourly rate of $711, in the 12-month […]