According to court documents, partners at Hogan Lovells and Latham & Watkins have recently crossed the $2,000/hour billing threshold. Meanwhile, other Big Law firms—including Sidley Austin, Kirkland & Ellis, Simpson Thacher & Bartlett, and Boies Schiller Flexner—are billing more than $1,900 an hour.
David Boies bills $1,950 an hour (at least), Simpson Thacher & Bartlett litigator Bryce Friedman charges $1,965 per hour, and former acting U.S. Solicitor General and current Hogan Lovells partner Neal Katyal bills $2,465 an hour.
While U.S. inflation rose by about 28% from 2007 to 2020, law firm rates rose by roughly 40%, or just shy of 3% per year, over the same time period, according to data from Thomson Reuters Peer Monitor. But regardless of the broader market conditions, Big Law firms usually raise their rates at least once a year.
The once-in-a-decade flood in demand for legal services we are currently in the midst of has driven law firm profits to new highs. 14 law firms averaged over $5 million in profit per equity partner in 2021, according to The American Lawyer. This was up from six firms just the previous year. Demand has been so high that some firms with leading practices in markets such as M&A and real estate have had to turn away clients.
Typically, firms receive little objection to higher rates from their massive corporate clients, especially when advising on high-risk litigation and billion-dollar deals. After all, what’s $2,000/hour compared to billions of dollars that could be won or lost?
While professional rules bar lawyers from charging what would be considered “unconscionable” or “unreasonable” rates, those rules don’t forbid clients from paying whatever price they deem appropriate for the situation they’re in.
What these rising hourly rate show is just how much clients value the time and advice of the most prestigious lawyers. And as long as clients believe these prestigious lawyers are providing value that less expensive lawyers cannot, they will happily keep paying their fees.