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Category: Hourly Rate Survey

Compare & Prove Hourly Rates with NALFA Survey

July 20, 2021

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.  NALFA has released the results from its 2020 Litigation Hourly Rate Survey.  The survey results, published in The 2020 Litigation Hourly Rate Survey & Report, shows hourly rate data on the very factors that correlate to hourly rates in litigation:

  • Geography / Location / Jurisdiction
  • Years of Litigation Experience / Seniority
  • Practice Area / Complexity of Case
  • Law Firm / Law Office Size

This empirical survey and report provides macro and micro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various litigation experience levels, from large law firms to solo shops, in routine and complex litigation, and in the nation’s largest legal markets and beyond.  This is the nation’s largest and most comprehensive survey or study on hourly rates.  This data-intensive survey contains hundreds of data sets covering all the relevant hourly rate variables.  The survey was designed to aid litigators in comparing rates within a litigation peer group and proving rates in court and ADR.

The 2020 Litigation Hourly Rate Survey & Report is divided into two parts, a free public portion and a private portion.  The public portion contains only the survey totals.  The data-rich private portion has the complete survey results including the raw data responses with percentages.  The private portion is free to members of our network (i.e. members, faculty, and fellows) and the 2020 litigation survey respondents.  The private portion is available for purchase to others.     

This 2020 Litigation Hourly Rate Survey & Report is now available for purchase.  For more information on this, email NALFA Executive Director, Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

NALFA: Hourly Rates Above National Averages in Large Chapter 11 Cases

May 6, 2021

A recent The American Lawyer story by Dan Roe, “Kirkland and Weil’s Fees in Chapter 11 Work Highlight Big Law Allure to Bankruptcy,” reports that even as the number of commercial Chapter 11 bankruptcies has dropped in recent months, large bankruptcies have continued to churn out big fee packages for some law firms—one reason why firms are continuing to invest and hire in their bankruptcy practices.  For instance, a glance at law firm fees in two cases—the Chapter 11 bankruptcy of Sears, filed October 2018, and the May 2020 J.C. Penney bankruptcy—reveal the cases have totaled more than $150 million for law firms since they beganMost of the money has gone to Am Law 200 firms, with some partners billing for more than $1,500 per hour.

Representing Sears Holdings Corp., Weil, Gotshal & Manges emerged as the biggest fee-earner in the Southern District of New York bankruptcy case, with more than $80 million in fees and expenses paid through the end of February 2021. Its partners billed between $1,695 and $1,200 per hour, while associates charged $1,100 to $595.  Akin Gump Strauss Hauer & Feld also made out big on the Sears bankruptcy.  Representing the bankruptcy’s unsecured creditors, the law firm received $48 million in total compensation through the end of February 2021 with a blended rate of $853 per hour.

Paul, Weiss, Rifkind, Wharton & Garrison, representing Sears, received almost $20 million, although most of it was completed before last year.  Its attorneys averaged $790 per hour, with partners topping out at $1,650.  And Wachtell, Lipton, Rosen & Katz did $873,000 worth of work representing Sears, with a blended rate of $1,287 and partners billing up to $1,500.  Meanwhile, the J.C. Penney bankruptcy has generated more than $28 million in fee revenue for law firmsRepresenting J.C. Penney, Kirkland & Ellis took most of the spoils with two massive fee applications totaling $20.9 million, with a blended attorney rate of approximately $1,000.

Cooley and Cole Schotz represented the creditor committee, with the former firm taking home $4.2 million in fee revenue with a blended rate of $970 average billing rate.  Cole Schotz earned $2.1 million for work it performed in the second half of the year, maintaining a $643 average hourly rate per attorney.  Katten Muchin Rosenman put in 1,318 professional hours to earn $1.1 million in fee revenue while representing J.C. Penney, averaging $960 per attorney per hour, while Quinn Emanuel Urquhart & Sullivan, representing the store’s subsidiaries, cleared $827,000 for its work in the second half of 2020, averaging just over $1,000 for its hourly rate.

The J.C. Penney restructuring also benefitted smaller-sized firms such as the New York law firm Herrick Feinstein, whose attorneys billed around $500 per hour for $1.5 million in fees.  The opportunity for large fee awards in Chapter 11 work continues to drive a flurry of bankruptcy partner hires.  In the last week, Willkie Farr & Gallagher added a three-partner bankruptcy group from Morrison & Foerster who represent creditor committees in high-profile cases and Sidley Austin hired Tom Califano, previously global co-chair and U.S. chair of DLA Piper’s restructuring group.  Last month, Kirkland brought on Christine Okike from Skadden, Arps, Slate, Meagher & Flom.

"Our analysis, from our most recent litigation hourly rate survey, shows that all these Chapter 11 bankruptcy rates are well above the approximate national averages," said Terry Jesse, Executive Director of NALFA.  "In fact, hourly rates in large Chapter 11 bankruptcies, may be one of the highest rate-charging practice areas, " Jesse wondered.

For more on NALFA's national averages, visit NALFA Releases 2020 Average Hourly Rates in Litigation.

Ninth Circuit Bumps Up Hourly Rate in Labor Case

April 19, 2021

A recent Law 360 story by Lauren Berg, “9th Circ. Bumps Ore. Atty’s Hourly Fee Rate in Labor Case,” reports that a U.S. Department of Labor administrative law judge wrongly reduced an Oregon attorney's hourly rate by $100 while awarding attorney fees in a Longshore and Harbor Workers' Compensation Act case, the Ninth Circuit ruled, telling the Benefits Review Board to assign the case to another judge.

In a 35-page published opinion (pdf), the three-judge panel said the review board should not have upheld the administrative law judge's decision to knock down attorney Charles Robinowitz's fee rate from $450 per hour to $349.85 per hour, finding that the attorney had presented "substantial evidence" that his requested rate was in line with similar services by lawyers of comparable skill and experience.  Robinowitz provided supportive affidavits from other attorneys, the 2012 Oregon State Bar Survey reporting that Portland attorneys with more than 30 years of experience billed between $300 per hour and $400 per hour, and court decisions awarding him $425 per hour and $420 per hour for work performed in 2012, 2013 and 2014, according to the opinion.

The fee appeal comes after Ladonna E. Seachris in 2006 filed a claim for benefits under the LHWCA following the 2005 death of her husband, who was injured while working as a longshoreman in 1979, according to court filings.  An administrative law judge denied the claim in 2010 and Seachris appealed to the Benefits Review Board, which affirmed the judge's order.  Seachris appealed again to the Ninth Circuit, which remanded the case in 2013, and the administrative law judge ruled in her favor in 2016, according to court records.

Following that decision, Seachris' attorney Robinowitz filed for attorney fees for 109 hours at a rate of $450 per hour, as well as costs of $5,413.  The administrative law judge in 2017, however, allowed the attorney 98 hours at about $341 per hour, according to court filings.  The Benefits Review Board then affirmed the decision, but increased the hourly rate to $349.85 because of an inflation error.

Seachris and her attorney then appealed to the Ninth Circuit. Seachris' husband's former employer, Brady-Hamilton Stevedore Co., said Robinowitz should only get an hourly fee rate of $358, arguing that the administrative law judge correctly calculated the market rate using the 2012 Oregon State Bar Survey, according to court filings.

In its opinion, the appellate panel said the judge erred by rejecting Robinowitz's evidence of prevailing market rates as outdated, saying reliance on historical market conditions is appropriate when it is the most current information available.  The panel said the judge needs to treat the parties equally, finding that both parties, as well as the judge, relied on dated evidence.

Brady-Hamilton also relied on the 2012 OSB Survey, the panel said, and the judge herself relied on that same survey as the linchpin of her rate decision.  By the time her fee decision came out in January 2017, the 2011 rates in that 2012 survey were already six years old, according to the opinion.  "The ALJ nevertheless relied on the survey by adjusting the 2011 data for inflation — appropriately so," the panel said. "But the ALJ declined to make similar adjustments to Robinowitz's evidence."

"We see no reason why she should not have taken the same approach to Robinowitz's evidence, and it was [an] error not to do so," the panel added.  The administrative law judge also erred by rejecting Robinowitz's evidence from the 2012 OSB Survey and not taking into account the way the survey reported rates, the panel said.  The survey reported hourly rates charged by Portland attorneys based on their years of experience, irrespective of practice area, and based on their practice area, irrespective of experience, according to the opinion.

Robinowitz relied on the survey chart based on years of experience to calculate his hourly rate, but the judge rejected the evidence as being too "one-dimensional," according to the panel.  But then the judge relied on the other survey chart based on practice area to determine her rate, the panel said.

"Although the ALJ rejected Robinowitz's survey evidence as 'one dimensional,' she proceeded to base her rate determination on the equally one dimensional chart reporting rates by practice area," the panel said.  "Even assuming arguendo that rates based on practice area are more probative than rates based on years of experience, the latter rates are at least relevant."  The panel found that the judge and the review board committed legal error in determining Robinowitz's hourly rate and that the judge's rate decision isn't supported by substantial evidence, according to the opinion.

The panel remanded the case and told the review board to assign it to a different judge, finding that "the tone of the ALJ's decision and the manner in which the ALJ evaluated the evidence suggest that the ALJ may not be able to provide Robinowitz with a fair and impartial hearing on remand."

The panel also noted that the Oregon State Bar has published an updated survey, saying the 2017 survey reports that Portland attorneys with more than 30 years of experience charged a median rate of $425 per hour in 2016 and for attorneys in the 75th percentile, the average rate was $495 per hour.  "These updated rates, which the BRB should take into account on remand, provide further support for Robinowitz's requested rate," the panel said.

Defense Firms and Clients Can Boast About Attorney Fee Wins

January 25, 2021

A recent Law.com story by Christine Simmons, “Both Law Firms and Clients Can Boast About Fee Wins,” reports that, several organizations have reported that, despite the Am Law 200’s worst fears, the legal industry enjoyed growth in 2020.  Citi Private Bank Law Firm Group and Hildebrandt Consulting have projected mid-single digit growth in revenue and mid to high single digit growth in profits. 

Last year, large firms managed to raise rate about 5%, according to James Jones, a senior fellow at the Georgetown Law Center on Ethics and the Legal Profession.  That’s remarkable considering the chaotic and depressing environment of 2020, and even more remarkable that the average annual rate increase for firms since 2008 has been about 3%.

But weren’t general counsel in cost control mode?  After all, according to survey data collected in June 2020 from 223 corporate legal departments, 89% of respondents said controlling outside counsel costs was a high priority.  So what gives?  How could law firms push through high rates at a time of such fee pressure?

Reconciling legal departments’ pressing need to cut costs with law firms’ revenue, profit and rate growth in 2020 requires a closer look at law firm segmentation, sector performance and the trajectory of the year.  But in the legal industry, 2020 is also a story about demand and the benefits of close cooperation on fee agreements, allowing both law firms and legal departments to have some bragging rights.

The Conversation

The lucrative year extended up and down the Am Law 100 and likely into the Second Hundred, but it came at different client relations strategies.  For the elite, rate and fee pressure was so little they could give out double bonuses to associates without billable hour requirements.  Wall Street firms and the Am Law 20 saw the benefit of ‘fight to quality” during an unpredictable year in business.  Meanwhile, some law firms did work with their clients on a mix of fee strategies and arrangements, to the benefit of both.

For instance, at Akerman, ranked No. 88 in the Am Law 100 last year, CEO Scott Meyers said collections remained steady last year, although Akerman worked with its clients to help them meet their own budgets while paying their legal bills.  “We’re close to our clients,” he said.  “We reached out to each one to understand, ‘what’s your financial position?  What’s your cash position?  What can you do, what can’t you do?’”  At the end of the financial year, the firm said it had a 6.5% increase in gross revenue in 2020.

Fee pressure, of course, depends on the industry.  And those with insurance industry clients and municipal clients are among those seeing the most discount pressure.  Mark Thompson, president and CEO of Marshall Dennehey Warner Coleman & Goggin, said while the firm’s hospital clients have returned to their pre-COVID payment rates, the firms’ base of municipal government clients haven’t yet returned to pre-COVID fee arrangements as a result of financial distress. “That is going to remain a problem going forward,” Thompson said in a Dec. 22 article. 

But nearly all sectors saw pressure in the beginning of the pandemic. At General Motors, the automaker reached out to the 19 firms on its panel of “strategic legal partners.” The second quarter presented an enormous, worrisome question mark, and the automaker—like so many businesses of all sizes—was looking to preserve cash.

GM general counsel Craig Glidden said the company didn’t know what would happen in the auto markets, which meant asking firms for help. And those firms stepped up, agreeing to deferred billing and alternative fee arrangements to relieve some of the company’s pressure.

The Significance

Yes, law departments are seeking high cost savings.  The 2021 Report on the State of the Legal Market from Thomson Reuters and Georgetown Law said spending on outside counsel did, in fact, decrease in the second and third quarters of 2020.  The report said 81% of legal departments found that general enforcement of billing guidelines, including reductions of invoice fees and expenses, was the most effective way to keep billing down.  Meanwhile, 53% of respondents requested standard discounts; 49% of respondents reduced timekeeper rate increases; and 45% used volume discounts.

At the same time work, the report shows that the average daily demand for law firm services per lawyer, based on billable hours, increased in the second half of the year, picking up in November to almost match the previous two year average.  So what happened to the portrait of the general counsel scrutinizing every line item and grilling firms about rate increase and discounts?

That picture is becoming increasingly faint.  Instead, the portrait emerging from 2020 is one of cooperation and demand.  Clients rushed to law firms for urgent legal advice during the pandemic, including counseling for workplace laws, PPP loans, restructuring and data security concerns.  Secondly, the circumstances from the pandemic gave rise to conversations about pricing, driving both sides of the law firm-client relationship to seek common ground—both in the form of tried-and-true alternative fee arrangements and those that reflect a more innovative approach.

Law firms have some leverage.  Just because a client wants a discount doesn’t mean a firm has to provide it.  “Clients understand the difficulty of onboarding new external counsel,” says McKinsey & Co. senior partner Alex D’Amico.  “There’s a real cost to bringing on a new firm.”

Judge Shaves Fee Request After Not Proving Rates

January 20, 2021

A recent NLJ story by C. Ryan Barber, “Ballard Spahr Wins $122K in Legal Fees in FOIA Suit Over PPP Loan Secrecy, reports that Ballard Spahr will receive $122,347 in legal fees for its work in an open records lawsuit that forced the U.S. government to release detailed information about who received hundreds of millions of dollars through a COVID-19 emergency loan program.  The law firm asked for nearly $154,842 in fees and costs, but U.S. District Judge James Boasberg of the District of Columbia said Ballard Spahr failed to support its billing rates and hours worked, and subsequently shaved off nearly $32,000.

Ballard Spahr, representing The Washington Post and other media outlets against the Small Business Administration and U.S. Treasury Department, sought to use the higher rates available under the Legal Services Index Matrix.  The federal government countered that Boasberg should use the lower rates detailed in a matrix used by lawyers at the U.S. Attorney’s Office for the District of Columbia.

Boasberg ultimately found Ballard Spahr failed to show how its preferred rates were in-line with rates used within the legal community for similar FOIA litigation, and granted the government’s request.  “They offer no evidence whatsoever—such as surveys or billing-rate tables—of rates charged and received by lawyers of comparable skill and experience in the D.C. market generally, let alone when handling FOIA cases,” Boasberg wrote.  “Indeed, their declarations do not even assert that their requested figures are in line with prevailing community rates for similar litigation.”

Boasberg shaved off another $6,710 due to an error in the hours billed, ultimately settling on $122,347 in legal fees and costs.  According to the USAO matrix listed in the ruling, Ballard Spahr partner Charles Tobin’s hourly rate came to $665.  Associates Maxwell Mishkin and Kristel Tupja’s rates came to $388 and $369 an hour, respectively.

Tobin said the award highlights the public importance of the case in ensuring there’s accountability of a program that handed out nearly half-a-billion dollars.  “Overall, the fee award is higher than most, and fully justified in this case,” Tobin said.  ”We are hopeful it serves as a powerful deterrent for government agencies that aren’t transparent enough on issues like this one.”

ALM Media Cites NALFA Hourly Rate Survey

March 11, 2020

ALM Media Properties LLC covers a recent NALFA survey, The 2020 Class Action Hourly Rate Survey in its recent Critical Mass newsletter, “Critical Mass: Coronavirus Cancels MDL Program at Duke Law,...

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