Bulletin – More Top Lawyers Break Through $1,000 Hourly Billing Barrier!

A report in the February 23, 2011, on-line edition of the ABA Journal recounts the upward number of lawyers who are not billing at over $1,000 per hour.  http://www.abajournal.com/weekly/article/more_top_lawyers_break_through_1000_hourly_billing_barrier?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email

Interestingly (but not surprising), all of the lawyers named in the report do corporate law work.  Topping the list is a “corporate lawyer” who bills at $1,250 an hour.  This reminds me that when I first stared practicing 37 years ago, I was billed at $25 an hour.  (Many people did say I was overpaid at that rate!)  I was lucky if I made $1,250 a month.

As I mostly do legal bill reviews for insurance companies, I do not see too many legal bills from large law firms that do “corporate” legal work.  However, I do get to see some from time to time.  What I do see in legal bills from large law firms often “boggles the mind and staggers the imagination” as an old boss of mine used to say. 

Forget about the high rates.  What I see are things in legal bills from large law firms that are clearly unethical as well as contrary to well settled case law.  Is there anyone out there who really believes a lawyer can work 18+ hour days or that you should pay paralegals $250 an hour just to upload documents into the firm’s database or pay a clerk $160 an hour to deliver documents? 

Why do these lawyers bill like this?  Well, it’s easy to see.  It is because their corporate clients let them get away with doing it. 

This is why I find it amusing, if not ironic that many in the corporate legal community are at the forefront of the movement to  alternative legal fees as if AFAs will lower their legal costs.   I have a message for those in the corporate legal community who are pushing AFAs as if AFAs alone will lower their legal costs:   just do a better job in reviewing your legal bills before you pay them!

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4 Responses to Bulletin – More Top Lawyers Break Through $1,000 Hourly Billing Barrier!

  1. guy h says:

    Interesting thoughts. I think we can devide these corporations (e.g. insureds) into those who care what th firms charge (due to sir’s deductibles etc) and those who just want the big name firms as their defense counsel. I ahve been outraged by defense firms who state openly that they will charge whatever thye want and the carrier will have to pay it. Deduct anything from their bills? forget it. You will be inundated with calls form the insured, risk managers, brokers and the like. Thi sissue presents very thorny issues that at times are very difficult to resolve shy of a dj

  2. Guy, I often do see independent or insured chosen counsel bills. While I agree that it is sometimes difficult from a business standpoint as you note to take appropriate deductions in their bills, the law and ethics of the profession are on the side of those insurers who choose to make appropriate deductions. For example, I do not read anywhere in ABA Rules of Prof. Conduct where independent or insured chosen counsel get a free pass from complying with the ethics of the legal profession when it comes to billing for legal fees. Also the U.S. Supreme Court has made clear that “hours not properly billed to one’s client are not properly billed to one’s adversary.” Hensley v. Eckerhart 461 U.S. 424, 457 (1985). Fortunately, most insurers that I deal with do choose to stand their ground when it comes to taking appropriate deductions in legal bills from independent or insured chosen counsel.

  3. Barry Zalma says:

    So, do you have a way to control contingency fee billing.

    If a lawyer takes a file on a 40% contingency, works 10 hours and settles the case for $2,000,000 — what is his hourly rate?

  4. I understand your point, however, I think the situation you describe is more of an aberration. I think all will agree that the real world of most contingency fee lawyers is that for every million dollar case involving a few hours of work there are tens of thousands of others that settle every day under ten thousand dollars or for nothing. I also think the same point can be made about lawyers who undertake matters on a flat fee basis. Sometimes they come out ahead when measuring their flat fee against the market hourly rates and sometimes they come out behind. Overall, they are probably somewhere in the middle or else why would it be cost effective for the client or the lawyer?

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