Yep, it’s true. Size matters in many things, including law firm billing rates.
A recent survey conducted in New York and comparing other US cities showed that the size of the law firm was in fact the most influencial factor when it came to setting attorney billing rates.
The survey was conducted across both large and small law firms and found that the larger the firm the larger the fee.
Many of you may not have guessed that. Many of you would have.
The survey results can be found here:
Firm size also matters when comparing New York firm billing rates to those in other cities, reports the New York Law Journal.
For example, a corporate law department may be able to get a better deal with a smaller firm in New York than a larger firm in another metropolitan area, said Craig Raeburn, vice president of legal analytics at Datacert|TyMetrix.
The Real Rate Report was released last week by advisory company CEB and Datacert|TyMetrix, which is part of Wolters Kluwer Corporate Legal Services.
The report analyzed more than $16.2 billion in fees billed for legal services in the United States from 2007 to 2013. The data comprise fees paid by 90 companies to more than 5,600 law firms and more than 206,000 lawyers.
The report found the factors that contribute to billing rates are, in order of importance, law firm size, location, lawyer experience, lawyer position, practice area and client industry.
Although the size of the lawyer’s firm has always been a significant factor in billing rates, it was the largest driver of rates in 2013, Raeburn said.
“The effect was so large that regardless of the market location or type of work performed, larger firms consistently charged higher rates. These data suggest that larger law firms have been more successful not only in promoting an integrated ‘one-stop-shop’ value proposition but also in obtaining a greater share of large matters,” the report said.
Large firms charge a premium over smaller firms in nearly every market in which they operate, the report said.
The analysis largely holds true in New York.
The report provides average billing rates in major cities, broken down by firm size: small firms (50 or fewer lawyers); midsize firms (51-200 lawyers); intermediate firms (201-500 lawyers); large firms (501-1,000 lawyers) and mega firms (more than 1,000 lawyers.)