Altman Weil is out with a flash survey of law firms on 2010 billing rates. The survey finds:
The survey found that US law firms project an average overall increase in rates of 3.2% for 2010. Most law firms will make rate change decisions based on specific variables including timekeeper class, practice, client or individual timekeeper. Only 13.1% will institute an across-the-board change in rates.
Larger firms anticipate a slightly higher average increase than smaller firms, with 1,000+ lawyer firms reporting an average 4% increase, while firms with 50-99 lawyers will raise rates just 3%. In those firms that plan an across-the-board increase, the average rate change will be 4.1%.
Law firms were asked to indicate the primary method they would use to adjust billing rates for 2010. Thirty percent of law firms indicated they would adjust their rates by timekeeper class. Other decision-making variables reported were practice or specialty (18.3%), client (12.8%) and individual timekeeper (11.1%).
Apart from the obvious "they just don’t get it", two things jumped out at me. One is that some nearly 13% of the firms are thinking of gouging specific clients where they can get away with it. Wouldn’t you love to read those letters? "Dear Client, we’ve determined that you are susceptible to being gouged, so we’ve decided to raise our rates for you. Similarly situated clients which are not as crazy as you will not see a price increase."
The other is that for all the talk about eliminating lockstep compensation amongst associates, 30% of firms are still using that lockstep method to get more from their clients regardless of whether the associate is providing any additional value to the client.
So, tell me again: how is that law firms are able to raise their prices more than inflation in an economy like this one? Clients? Anyone? I’m dying to learn the secret.