Law Firm Rate Hikes Increased in 2017
Law firm billing rates continued to rise in 2017, according to a new report from LexisNexis. The report also found lower usage of alternative fee arrangements—such as contingency-fee litigation—that help to offset growing litigation costs.
Contingency-fee litigation is an alternative to high hourly rates.
The Business Trial Group is Florida’s largest contingency-fee commercial litigation practice. We charge no hourly fees for any matter because we believe that anyone with a meritorious claim deserves access to high-quality legal representation.
If you are involved in a business dispute, contact us to discuss your claim.
Higher Rate Increases Across the Board
The LexisNexis CounselLink Trends Report is an annual publication that covers key metrics related to law firm hourly rates. This year’s report—based on data from over $30 billion in legal spending and nearly 1.7 million matters—shows that 2017 rate increases were higher and more widespread than in previous years.
Median partner billing rates were higher in 2017 than in 2016 among firms in nearly every size category, and the rate increases were greater than in previous years. More of the country also showed high rate increases compared to prior years. Three of the twelve practice areas analyzed showed rate growth at or exceeding 4 percent.
Kristina Satkunas, director of strategic consulting at LexisNexis’ CounselLink, told Law360 that, “Rates always increase. In the five years we’ve been doing the analysis we always see an increase. But no matter how I sliced it, whether I was looking at the size of firms, cities, type of work, the increases were higher this year.”
Median partner hourly rates ranged from $195 for insurance matters to $678 for mergers and acquisitions. The median rate for general litigation was $360. Hourly rates for some matters exceeded $800.
Other studies have shown that top-earning attorneys charge up to $1,000 – $2,000 per hour.
Use of Alternative Fee Arrangements Stagnant
Rising litigation costs are leading to increased client demand for alternative fee arrangements (that is, non-hourly billing), which provide greater client value and promote risk sharing between attorney and client.
In 2017, 9.2 percent of legal matters were billed under an AFA.
But the Trends Report found that overall use of AFAs actually decreased from 2016 to 2017. The percentage of matters billed under an AFA decreased by 0.7 points to 9.2 percent, while the percentage of AFA billings decreased by 0.1 point to 7.4 percent.
LexisNexis notes that AFA usage varies considerably by practice area. For example, about 20 percent of employment and labor matters utilized an AFA, compared to less than 2 percent of real estate matters. High-cost matters are more likely to be billed under some form of an AFA, the Trends Report observes.
Another study on law firm trends from consulting firm Altman Weil shows that firms are becoming less likely over time to proactively offer AFAs. The 2017 Law Firms in Transition Survey polled 798 law firms with 50 or more lawyers and found that 92.9 percent use some type of non-hourly based billing. But only 26.2 percent of firms said they offer non-hourly billing proactively (as opposed to in response to clients requests). That figure is down from 27.8 percent in 2016 and 41.3 percent in 2010.
Florida’s Contingency-Fee Complex Business Litigation Attorneys
The reality is for most small businesses and individuals, high hourly fees have made complex or lengthy litigation untenable. Forced to pay an attorney hundreds of dollars per hour, clients often have to choose between giving up their legal fight, accepting a subpar settlement, and going broke from legal fees.
Contingency-fee litigation from the Business Trial Group is a better option. Since we charge no hourly fees—and no fees at all unless we win—clients are able to pursue the full value of their claim, even against much wealthier opponents.
To discuss your claim with an attorney at no charge and with no obligation, please contact us.