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.
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.
Join 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)
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.
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:
- What: 2015 Mid-Year Trends Report: 6 Key Metrics Webinar
- When: October 28, 2015 | 1:00-1:45 p.m. (ET)
- Where: Online, register here
- Cost: Complimentary with registration
- Speaker: Kris Satkunas, principal author of the ELM Trends report
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:
- Legal Spend Trend: Big Law Winning More IP Litigation Work
- Law Firm Bill Rates Rising? Update on Key Legal Spend Metrics
- Infographic Friday: Law Firm M&A Billings Nearly Double
- ELM Trends: Corporate Legal Continues Law Firm Consolidation
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