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Category: Fee Data / Fee Analytics

NALFA Releases 2022 Litigation Hourly Rate Survey & Report

December 20, 2022

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2022 hourly rate survey.  The survey results, published in The 2022 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the third year NALFA has conducted this survey on billing rates.  The 2022 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 16,600 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2022 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

Judge Needs More Data in $2.8M Attorney Fee Request

November 10, 2022

A recent Law 360 story by Leslie Pappas, “Chancery Oks Aerospace Co.’s Pay Suit Deal, Defers Fees” reports that a Delaware Chancery Court judge approved a settlement between aerospace parts manufacturer TransDigm Group Inc. and a stockholder who sued over excessive director pay, but postponed a decision on a requested $2.8 million attorney fee award, saying she lacked data to evaluate it.

At a bench ruling at the end of a virtual hearing, Vice Chancellor Lori W. Will told attorneys for plaintiff Matthew Sciabacucchi, represented by Farnan LLP and Levi & Korsinsky LLP, that she intended to award a fee but couldn't do it without more information.  "I don't have the full picture," she said. "I'm going to give counsel a better shot of submitting the information I'm asking for."  The attorneys had sought $2.8 million in fees and a $4,000 incentive award for the deal, which they estimated would save TransDigm $23.8 million in cash over the next four years.

Sciabacucchi sued in November 2021, claiming the company's top officers and directors were awarding themselves compensation that was 176% higher than their peers.  TransDigm's executive chairman W. Nicholas Howley and its president and CEO Kevin Stein, for example, received a "staggering" $68.1 million and $22 million respectively for the company's fiscal year ending September 2020, according to the complaint.

Vice Chancellor Will said she didn't know the net present value of the estimated $23.8 million savings, nor did she have enough information to assess the effects of reducing the strike price of the options.  "I do intend to award a fee," she said.  "This is a good settlement, and counsel should be commended for it."

IBA Panel: Narrow The Gender Hourly Billing Rate Gap in Law

November 4, 2022

A recent Law 360 story by Carolina Bolado, “Start With Fixing Gender Billable Rate Gap, IBA Panel Says” reports that law firms looking to retain their female talent need to start by narrowing the billable rate gap, which experts at the International Bar Association conference in Miami called the "Rosetta Stone" of the gender gap issue.  At an IBA panel on how to keep women in the profession, Michael Ellenhorn, CEO of Decipher, a data intelligence firm focused on the lateral legal market, said the data show women routinely bill more hours than their male counterparts but recover less money for that work.  Addressing this gap in billable rates is where firms need to start, he said.

"It's the baseline where this problem can be solved," Ellenhorn said.  "At a minimum, women partners need to be compensated and remunerated at the same rate as their male counterparts.  From an objective standpoint, that is one way we can move the ball down the pitch."  The panelists, a global group gathered together at the IBA conference to discuss the gender inequality problem, said part of the issue is that many managing partners don't even realize that there is a problem.

Hilarie Bass, the former co-president of Greenberg Traurig LLP who now runs the Bass Institute for Diversity and Inclusion, said that a study conducted during her tenure as American Bar Association president in 2017-2018 found that 91% of law firm leaders believe they are advocates of gender diversity.  The study found three-quarters of leaders believe that they are completely objective and committed to elevating women to equity partner status and that they are successful in retaining women.

But the female respondents to the survey did not agree.  A majority of women in the survey said they were overlooked for advancement and were compensated at a lower level than comparable male colleagues, Bass said.  Many also felt they were treated as a token representative for diversity, which Bass said is becoming more of an issue as clients demand diverse legal teams.  Bass said women reported being brought in to pitch the client but being sidelined not long afterward.

Ellenhorn said firms need to start by measuring data, in particular the comparison between average realized rates for male and female partners and how the firm apportions origination credit.  "It's very simple to do," Ellenhorn said.  "Those two data points will get you a long way to understanding what the mix is in each of your firms."  He added that his group has found that men tend to over-forecast their books of business and then underperform, while women in general under-forecast and overperform.  Firms need to stop penalizing women for doing this, not just in the lateral market but during firms' business and budget planning processes, he said.

Ellenhorn said his organization has looked at thousands of lateral partner questionnaires, which are forms lawyers fill out when they move from one firm to another.  He said that while women make up just one-fifth of equity partners, they make up 31% of lateral partner moves.  "You start to scratch your head a little bit about what is going on in the market," Ellenhorn said.  And unlike their male counterparts, women depart and oftentimes within the data set they don't show up somewhere else. In the last two years in the U.S., that's about 8,000 women partners who have likely disappeared from the profession."

NALFA Releases 2021 Litigation Hourly Rate Survey & Report

July 19, 2022

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2021 hourly rate survey.  The survey results, published in The 2021 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the second year NALFA has conducted this survey on billing rates.  The 2021 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 8,400 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2021 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

NALFA Members Quoted in Bloomberg Story on Billing Rates

June 10, 2022

A recent Bloomberg Law story by Roy Strom, “Big Law Rates Topping $2,000 Leave Value ‘In Eye of Beholder’” quoted two NALFA members, John D. O'Connor of O'Connor & Associates in San Francisco and Jacqueline S. Vinaccia of Vanst Law LLP in San Diego, on a news story on hourly billing rates.  His story reads:

Some of the nation’s top law firms are charging more than $2,000 an hour, setting a new pinnacle after a two-year burst in demand.  Partners at Hogan Lovells and Latham & Watkins have crossed the threshold, according to court documents in bankruptcy cases filed within the past year.  Other firms came close to the mark, billing more than $1,900, according to the documents.  They include Kirkland & Ellis, Simpson Thacher & Bartlett, Boies Schiller Flexner, and Sidley Austin.

Simpson Thacher & Bartlett litigator Bryce Friedman, who helps big-name clients out of jams, especially when they’re accused of fraud, charges $1,965 every 60 minutes, according to a court document.  In need of a former acting US Solicitor General? Hogan Lovells partner Neal Katyal bills time at $2,465 an hour.  Want to hire famous litigator David Boies?  That’ll cost $1,950 an hour (at least).  Reuters was first to report their fees.

Eye-watering rates are nothing new for Big Law firms, which typically ask clients to pay higher prices at least once a year, regardless of broader market conditions.  “Value is in the eye of the beholder,” said John O’Connor, a San Francisco-based expert on legal fees.  “The perceived value of a good lawyer can reach into the multi-billions of dollars.”  Law firms have been more successful raising rates than most other businesses over the past 15 years.

Law firm rates rose by roughly 40 percent from 2007 to 2020, or just short of 3 percent per year, Thomson Reuters Peer Monitor data show.  US inflation rose by about 28% during that time.  The 100 largest law firms in the past two years achieved their largest rate increases in more than a decade, Peer Monitor says.  The rates surged more than 6% in 2020 and grew another 5.6% through November of last year.  Neither level had been breached since 2008.

The price hikes occurred during a once-in-a-decade surge in demand for law services, which propelled profits at firms to new levels.  Fourteen law firms reported average profits per equity partner in 2021 over $5 million, according to data from The American Lawyer.  That was up from six the previous year.

The highest-performing firms, where lawyers charge the highest prices, have outperformed their smaller peers.  Firms with leading practices in markets such as mergers and acquisitions, capital markets, and real estate were forced to turn away work at some points during the pandemic-fueled surge.  Firms receive relatively tepid pushback from their giant corporate clients, especially when advising on bet-the-company litigation or billion-dollar deals.

The portion of bills law firms collected—a sign of how willingly clients pay full-freight—rose during the previous two years after drifting lower following the Great Financial Crisis.  Collection rates last year breached 90% for the first time since 2009, Peer Monitor data show.  Professional rules prohibit lawyers from charging “unconscionable” or “unreasonable” rates. 

But that doesn’t preclude clients from paying any price they perceive as valuable, said Jacqueline Vinaccia, a San Diego-based lawyer who testifies on lawyer fee disputes.  Lawyers’ fees are usually only contested when they will be paid by a third party.

That happened recently with Hogan Lovells’ Katyal, whose nearly $2,500 an hour fee was contested in May by a US trustee overseeing a bankruptcy case involving a Johnson & Johnson unit facing claims its talc-based powders caused cancer.  The trustee, who protects the financial interests of bankruptcy estates, argued Katyal’s fee was more than $1,000 an hour higher than rates charged by lawyers in the same case at Jones Day and Skadden Arps Slate Meagher & Flom.  A hearing on the trustee’s objection is scheduled for next week.  Hogan Lovells did not respond to a request for comment on the objection.

Vinaccia said the firm’s options will be to reduce its fee, withdraw from the case, or argue the levy is reasonable, most likely based on Katyal’s extensive experience arguing appeals.  Still, the hourly rate shows just how valuable the most prestigious lawyers’ time can be—even compared to their highly compensated competitors.  “If the argument is that Jones Day and Skadden Arps are less expensive, then you’re already talking about the cream of the crop, the top-of-the-barrel law firms,” Vinaccia said.  “I can’t imagine a case in which I might argue those two firms are more reasonable than the rates I’m dealing with.”