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Litigation Billing Rate Data Has Chi-Squared Distribution

January 25, 2023 | Posted in : Hourly Rate Survey, Hourly Rates, NALFA News, Study / Report

NALFA recently released the results from its 2022 Litigation Hourly Rate Survey.  The results, published in The 2022 Litigation Hourly Rate Survey & Report, contains billing rate data on the factors that correlate to hourly rates in litigation: geography, years of litigation experience, position or title, complexity of case, and litigation practice 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.  Over 16,600 qualified litigators participated in this survey.  This is the nation’s largest and most comprehensive survey or study of hourly billing rates in litigation.

For the third year in a row, at the macro level, we find a chi-squared distribution for litigation billing rates.  When we plot all responses (plaintiffs' and defense) in both regular and complex litigation on a graph (x,y axis), we have a general shape distribution model known as chi-squared distribution.  That is, the distribution is not the standard or normal (classic bell-shaped curve) distribution.  In data science, chi-squared is a gamma type distribution.  Our model here starts from a low point ($200-$250), climbs to the highest point ($451-$500), before the midpoint ($601-$650), then declines gradually and finishes with a long tail with an uptick at the very end (Over $1100). 

"You can see that the climb upwards is steeper than the gradual decline downwards," said Terry Jesse, Executive Director of NALFA.  "Just knowing, at the macro level, that litigation rates fall within the chi-squared distribution is a major development in hourly rate economics," Jesse added.  In the graph below, the y axis is the percentage of responses and the x axis is our 20-point hourly rate scale (Less than $200 to Over $1100).