Some New York Lawyers Now Bill at $1,000 Per Hour. So What?

There has been considerable discussion about the news that some lawyers at major New York firms are billing their services at $1,000 per hour or more. 

Robert Rosenberg, a partner at Latham & Watkins LLP, concedes that the four-figure rate has symbolic significance, but adds, "like the year 2000, it's just a number."  Also, at the Wall Street Journal Law Blog, Peter Lattman points out that the increased rates are due in part to increased costs, such as the $160,000 salaries that many large firms are now paying to first-year associates. 

Emphasizing the importance of client service and value delivered, Carolyn Elefant notes that problems can arise "when lawyers raise rates and they don't increase value but just keep billing as usual, only at the higher rate."  Similarly, John Walker invites us to remember the value that the lawyers deliver to their clients.  Specifically, Walker explains:

• The key issue is the value the lawyer delivers to the client;
• The value delivered is equal to the total client value minus the total fee the client pays for the lawyer's services; and
• It is the client who determines whether he or she has received value from the lawyer's services.

Looking at all these considerations--rates charged by other lawyers in major world cities, compensation for other highly-paid professionals, increased operating costs for law firms, and the importance of the value clients receive for their legal service dollars--it is too early to see what impact the $1,000+ rates will have on the profession.  Remember that there is only a very small group of lawyers charging such rates to a relatively small clientele.  Considering that more than two thirds of the lawyers in private practice in the United States work at firms with fewer than 100 lawyers, it is quite possible that the billing rates of a very small percentage of firms will have little, if any, impact on the fees most lawyers charge their clients.

By Steve Imparl, guest blogger