Getting paid at the rate of $2000 an hour may seem a pipe dream of interplanetary proportions, but some clients are willing to pay it and several are happy to do so.
A new report from BTI Consulting shows that there has been a significant increase in the rate corporate clients are prepared to pay for their lawyers, up by 20 percent in the last year to its highest ever level – now reaching $2000 per hour.
The rate was $1600 last year.
So what’s next, they ask? $5000 an hour?
What do the clients make of all this?Frankly, the lawyers aren’t concerned because the highest rate now commands 2.9 times the average rate clients pay and BTI have provided the six reasons why law firms are able to receive those rates:
1. Attorneys bringing deep understanding of the business risk
2 Penetrating command of the solution or path to a solution
3. Unmatched commitment to help
4. Clearly grasping the magnitude of the enterprise level risk at hand
5. Easily anticipating the needs and obstacles from the start
6. Eagerness to discuss strategies and actions before being hired
These translate into a top hourly rate of $2000 an hour.
But for what work?
An analysis shows that the top rates are paid for major enterprise levbel M&A litigation, large scale government investigations, defense actions against “activist” hedge funds and the ‘bet-the-company’ IP work.
The survey shows that almost 60 per cent of corporate counsel in major corporations now pay at least one law firm $1000 an hour, compared to 39 per cent doing the same thing last year.
BTI’s blog reports: The average of the entire spectrum of highest rates paid across all large companies is $982 per hour—up from $909 in 2013, after all discounts. We estimate the highest rate paid by middle market clients—between $50 million and $750 million in revenue—is $862 per hour, primarily for M&A related work.
But here’s another key finding from the research – in almost all instances, the corporate decision maker knew precisely which firm to hire for the top level work, based on their experiences with them and knowing they would deliver the legal goods.
As the blog notes: “Law firms position themselves for the high-end work by talking business implications, sharing strategies, and maintaining an active ongoing dialogue with their clients—well before a high-end problem ever rears its ugly head.”