Attorney bills get steeper as law firm raise hourly rates
When it comes to law firm billing, many lawyers will likely remember 2005 as the year Venable LLP chairman Benjamin Civiletti became the first lawyer in the nation to bill $1,000 an hour.
Civiletti, a former U.S. attorney general, made news throughout the nation's legal community when the National Law Journal reported his four-figure rate in its annual lawyer compensation survey.
But at Greater Baltimore law firms, hourly rates continued a gradual rise, according to the Baltimore Business Journal's 2006 List of largest law firms. Among the 24 firms that disclosed average hourly rates in the survey, all but 3 increased rates, with most increases in the range of $5 to $50. Another 26 firms declined to disclose hourly rates.
Key factors affecting rates, lawyers said, include the market's demand for legal services, the competition for talented lawyers and the needs of clients. Demand for legal work in Greater Baltimore continues to grow, they said.
At Venable -- the largest law firm in Greater Baltimore -- the average rate for its 95 local partners rose by $18 from a year ago, to $444. Venable has raised rates 5 percent to 6 percent annually in recent years, as the economy powers demand for legal work, said Michael Baader, partner-in-charge of Venable's Baltimore office. In particular, he said, government contractors' burgeoning business in Greater Baltimore has increased their need for legal guidance.
Civiletti's rate reflects his 40 years in law and the complex arbitration and investigative work he does for clients, Baader said.
And, he added, most clients focus more on the total cost for a legal matter than a lawyer's hourly rate.
Along with Civiletti's big number, another factor affecting billing for a firm with a major local presence was the creation of the international mega-firm DLA Piper Rudnick Gray Cary. Piper Rudnick, with longtime roots in Baltimore, merged in early 2005 with firms based in England and California.
In 2004, DLA Piper's partners billed an average of $425 an hour and associates billed an average of $280, according to 2004 Business Journal research. For 2005, average hourly rates for DLA Piper associates ranged from $240 to $535. The firm's 83 local partners averaged between $385 and $900.
One of the bigger rate increases in this year's List was at Bouland & Brush, Greater Baltimore's 17th-largest law firm. Rates for partners jumped by $50 to $295 per hour.
The firm took a close look at competitors' rates, said Managing Attorney Dean Bouland, and made some changes. "I think we had been undercompensating ourselves," Bouland said. Still, Bouland & Brush's rates remain lower than those of many competitors, he said.
Firms may address rates in their year-end budget process, or deal with them in individual attorneys' annual reviews.
