Billing rates of $1,000 per hour used to define the upper echelon of corporate lawyers. But now there may be a new threshold for the über elite: hourly rates of $1,500.
Even with low inflation and low demand for legal services, law firms have raised their rates between 3% and 4% every year since the downturn, nudging some of them into the once-unchartered territory of $1,500 per hour, according to the Wall Street Journal.
The sky high rates seem to fly in the face of the principle of supply and demand since they come at a time when corporate legal departments are keeping more work in-house instead of hiring outside firms. But that seems to be the point. Firms are charging such extraordinary rates in order to squeeze more money out of the most critical legal matters, which companies still outsource to law firms and their teams of highly specialized lawyers.
The near-$1,500 per hour rates cited by the Journal appeared in the court dockets of Chapter 11 bankruptcies. They were paid to lawyers in M&A, tax, restructuring, antitrust, and high-profile litigation and appeals, which tend to be the legal fields that are the least price-sensitive.
And believe it or not there are lawyers who charge even more than that. The services of a limited roster of superstar lawyers can max out at $1,800 and $1,950 per hour, the Journal says.