Blawg Review # 191
Social and Professional Networking Are All About Participation, Not Association

Hourly Billing Rate of $1,260 Tops National Survey

Many of you may be surprised that I have no problem with the hourly rate that lawyers think their time might be worth.  I do have a problem with billing by the hour.  The distinction is as follows.

I admit that certain things that lawyers can achieve for their clients have value well beyond an hourly rate found on a rate sheet.  When a lawyer delivers a bottom line result for a client that puts hundreds or millions of dollars in that client’s pocket, even $1,260.00 may shortchange the lawyer on the value that lawyer delivered. 

But I did interesting in this article at law.comLaw Firm Fees Defy Gravity, Annual Survey Shows” is that law firms apparently continue to see increasing the hourly rate as the solution to increasing revenues.  Increased revenues are becoming more important for law firms since the volume of work for many firms is severely down.  If you cannot increase the number of hours worked in your firm, your only other option is to increase the hourly rate.

The flaw in this thinking is that law firms keep stepping into the same hole over and over again.  They want to increase revenue, they ought to focus on providing more value to their client and charging for that value.  Multiplying the number of hours worked by an hourly rate will never accomplish that goal. 


Dale Strauss

Your analysis is correct, but just like clients worry about "who's counting the hours for me" they really worry about "who's assessing the value to me?" How do you overcome the natural tendency towards skepticism about the value of the product, particularly when clients often view legal "services" like any other service - as a cost center, not as a wealth builder?

Game fighting

wow, 1,200 per hour is pretty crazy. Who on earth would ever pay that?

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