A recent Inside Counsel story, “Litigation: Using Bill Surveys to Determine ‘Reasonable’ Rates,” written by David McMahon of Barger & Wolen, exams the use of billing hourly rate surveys and how they can be evaluated to determine whether they are reasonable or not.  McMahon writes:

The Supreme Court has stated that a reasonable hourly rate is generally equated to the prevailing market rate for attorneys providing comparable services.  The fact that a client is willing to pay rates in excess of market rates does not necessarily make the higher rates unreasonable or appropriate, particularly where the charges will be passed on to third parties who may have a contractual obligation to indemnify.

There are several reputable billing rate surveys available:

• “Law Firm Billing Rates and Practices” and “Survey of Law Firm Economics” by ALM Legal Intelligence
• “Real Rate Report” by CT TyMetrix
• The Laffey Matrix
• “Law Firm Billing Survey” by The National Law Journal
• “Report of the Economic Survey” by the American Intellectual Property Law Association (AIPLA)
• State rate surveys, such as the Oregon State Bar Hourly Rate Survey

McMahon concludes:

As attorney’s reasonable hourly rate is generally equated to the prevailing market rate for attorneys providing comparable services.  By using numerous resources available, it is possible to review the billing rates of individual lawyers in a particular matter and determine what a reasonable billing rate may be.  In addition, in-house counsel should factor in the background of individual lawyers and the nature of the work performed before assigning the lawyer an adjusting billing rate that is appropriate based on the nature of her practice and the length of experience in comparison to lawyers providing similar services.

Sometimes this information can be used to negotiate a reasonable billing rate prior to legal work being performed.  In other circumstances, determining a reasonable billing rate may assist in reviewing the legal fees for reasonableness.