So Much for the End of the Billable Hour
So much for the death of the billable hour. When it comes to Madoff-related litigation, lawyers across the pond are still commanding the $1,000+/hour billable rates that I'd thought were so two years ago. According to Bloomberg, clients are paying a premium of 1,000 pounds ($1,440) an hour for financial regulatory advice, even
while law firms are suffering the consequences of the credit crisis.
So why can firms bill those kinds of rates? For starters, the bigger the problem, the more willing people are to accept fees, says Michael O'Kane, a criminal and regulatory specialist at Peters & Peters. Second, regulatory work is typically partner-intensive, which means that the firm can't profit from associate leverage. As a result, regulatory lawyers are billed out at a higher rate to stay on par with the more leveraged transactional teams.
For other matters at least, many still question the sustainability of hourly rates. Legal commentators -- and plenty of big firm lawyers themselves -- believe that in this climate, in-house lawyers want law firm discounts and won't agree to these rates, no matter the complexity of the problem.
Posted by Carolyn Elefant on March 24, 2009 at 02:13 PM | Permalink
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