According to a new study by Wells Fargo Bank Legal Practice Specialty Group, lawyers in the United States aren’t billing as much as they used to, but they charging more per hour for their services.
While revenue rose an average of 4.1% at 60 of the nation’s highest-grossing firms surveyed by the bank, demand —the number of hours logged by a firm’s attorneys—rose just 1.7%. Among lower-grossing firms in the survey, revenue rose 2.7% in the first six months of 2015, compared to flat demand.
Firms made up for the weak demand by charging clients more per hour, Wells Fargo found. The average rate increase across the board rose 3.3%. Equity partners are now charging an average of $787 per hour nationwide, according to the bank. Associates are charging $519 per hour.
Citing the study, the Wall Street Journal Law Blog reported:
Other interesting findings from the mid-year survey include:
The most profitable firms aren’t breaking away from the pack as much as they did last year. Those high-profit firms saw revenue increase 2.1%, lower than the overall average. That’s likely because the first half of 2014 was “extraordinary,” Mr. Mendola said.
Lawyers aren’t billing as much as they used to. Lawyers in the top 100 highest-grossing firms are on track to bill an average of around 1,650 hours this year, down from pre-recession highs in the 1,800 range. Senior lawyers are dragging down those numbers, Wells Fargo found.
Firms continue to rely on their partners to finance their business. The average amount of partner-contributed capital held by firms is up 7.3%.
In a somewhat counter-intuitive footnote, despite the lackluster demand there are actually more lawyers at the surveyed firms than there were last year.
