- Law firm partner rates increased the most last year in New York, San Francisco and Washington, D.C., among major U.S. cities, with all three seeing rate growth rates above 4%, according to a report.
- New York state was also one of the U.S. jurisdictions that saw median hourly billing rates rise significantly in 2021, though Texas led the way among states with a 4.7% increase, the report from LexisNexis CounselLink found.
- Internationally, South Korea and the United Kingdom billed in-house legal departments some of the highest median partner rates in practice areas such as corporate and litigation. The report is based on data from more than $49 billion in legal spending across more than 1.2 million matters.
The rates law firm partners in the U.S. charged clients last year rose an average of 3.4% compared to the year prior, according to the 2022 Enterprise Legal Management Trends Report LexisNexis CounselLink released last week.
This overall increase was driven by billing rate increases that exceeded the average in major cities with a high concentration of the country’s largest and most expensive law firms.
New York City led the way with a 4.3% increase in the median partner rate outside counsel charged, closely followed by Washington, D.C., at 4.2% and San Francisco at 4%. These increases resulted in New York City’s median partner rate rising to $955, Washington, D.C.’s, jumping to $872 and San Francisco’s rising to $580.
By contrast, two large cities that saw growth rates of less than 2% were Boston and Houston. But Boston still was one of four cities with an average partner rate above $800, as it clocked it at $830.
Even with the lower than average growth rate in Houston last year, Texas saw the highest growth rate among states, with its 4.7% bump bringing its median partner rate to $532.
New York State was not far behind, as its 4.5% rate increase drove its median hourly rate to $1,020.
The high rates billed in New York, a financial epicenter, came during a year in which a record-level of M&A activity resulted in expensive mergers and acquisitions work making up a greater share of legal department billings overall.
Nebraska and Wisconsin, not known as legal hotbeds, were two other states that saw among the highest rate hikes.
A 4.6% increase in Nebraska bumped its median partner rate to $349, while a 4.2% increase in Wisconsin resulted in its median partner rate ascending to $475.
U.S. corporations with international interests and operations often retain law firms based in other countries to assist them, so the rates these firms charge are of interest to in-house legal departments.
South Korea firms charge the highest average rates internationally for two of the four major practice areas listed in the CounselLink report: litigation ($780) and labor and employment ($770).
South Korea firms charge the second-highest rates on average for corporate work ($780) and IP matters ($655).
The U.K. posted the highest median partner rate for corporate work ($782), second highest for labor and employment ($625) and second highest for litigation ($736).
Netherlands posted the highest rate for IP ($671) and third highest for litigation ($687).
“In all matter categories, India and Brazil had partners billing at considerably lower rates,” the report said.