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Upward trend still in evidence at law firms, with some notable figures at the high end of the scale

It's a good time to be a lawyer.

Billing rates for law firm attorneys jumped last year, with partners and associates raking in more dollars per hour than ever before. And at least one partner now charges $1,000, the first four-figure hourly rate reported to The National Law Journal.

This year, 116 law firms responded to questions about billing rates included as part of the NLJ's 2005 survey of the nation's 250 largest law firms. (The survey is sent to about 300 firms, therefore some firms included in this survey are not among the NLJ 250.) Of those 116 responding firms, 102 also supplied answers to those questions in the 2004 survey.

The 2005 results indicate that most firms raised their rates for both partners and associates at both the high and low ends of their ranges.

Seventy-nine of the 102 firms that responded in both 2004 and 2005 raised their highest rates for partner this year, while 10 reduced theirs and 13 kept them the same. Seventy-six firms raised their lowest rates for partners, while 10 decreased them and 16 kept them the same.

As for associates, 82 firms raised their highest rates, 15 decreased them and five maintained them. Seventy-four raised their lowest rates, eight decreased them and 20 kept them the same.

At Venable, the partner high is up to $1,000. Just as remarkable, Dorsey & Whitney reported an associate high of $835 -- more than most partners make.

"You have to look behind that [rate] to what those people do," said Ward Bower, a principal at the legal consulting firm Altman Weil in Philadelphia. "It might be that there's something unique that there's a high demand for."

The partner charging up to $1,000 an hour at Venable is Benjamin Civiletti, the firm chairman and a 70-year-old partner in the firm's Baltimore office who was the U.S. attorney general under President Jimmy Carter. He specializes in internal investigations and corporate defense.

"That's a rate that he charges for the most extraordinary work," explained James Shea, the managing partner of Washington-based Venable, of the $1,000 rate. Shea said it was doubtful that Civiletti is the only partner at a major U.S. firm who charges $1,000.

Civiletti raised his highest hourly rate from $810 in 2004 to $1,000 this year. Shea said the firm raises its rates based on the development of certain practice areas, and a demand for certain types of work.

"None of that surprises or shocks me," Bower said of the $1,000 rate. "How many Ben Civilettis are there in the country? With his expertise and his contacts, his Rolodex alone must be one of the most impressive in the country.

"Big-ticket litigation, hostile takeovers, internal investigation, the top people in those areas are billing at the highest rates," he continued. "Those are bet-the-company types of work. [Companies] want the best, and they're willing to pay for the best.

"If you look at a multinational corporation, they're used to paying that much at London law firms," Bower said. "They're charging six, seven hundred pounds, and when you convert the pound, those lawyers are charging over $1,000." He added, "It's interesting to note that with all the talk of resistance to increase, the numbers still continue to go up."

Bower also pointed out that many large firms offer discounted rates, so the highs may be misleading because few clients are actually billed that high.

The partner high last year was at Reed Smith, which reported having a partner who charged $875 per hour. A firm spokesman had said the partner worked in London, and the high rate was a result of the exchange rate.

This year, Dorsey & Whitney's highest associate billing rate of $835 is notable, given that the highest partner rate at the firm is $876.75, slightly higher than the highest reported rate last year. (The firm would not disclose which associate billed at that rate.) The highest rate for an associate reported last year was $550 at Palo Alto, Calif.-based Cooley Godward.

The high rates at Dorsey for partners and associates this year represent the billing rates in the tax litigation group in the United Kingdom. The group specializes in complex litigation, which bills at a high rate, and is additionally bumped up by the exchange rate, said Larry Splett, a firm spokesman. Dorsey did not report any rates last year. The firm increased its rates by around 3 percent, Splett said.

"What it amounts to is most likely firms paying attention to market-based pricing, what the market is willing and able to pay," Bower said. This is a contrast to previous years, when firms have traditionally set pricing based on the seniority of an attorney rather than his or her expertise, he said.

"The biggest problem is not client acceptance [of the high rates], it is acceptance within the firm, because it probably goes against the hierarchy," Bower said.

The lowest associate billing rate reported this year was $75 at Philadelphia-based Cozen O'Connor, in comparison with $90 last year at Akron, Ohio-based Buckingham, Doolittle & Burroughs. The lowest partner billing rate was $105, also at Cozen O'Connor. Last year it was $135 at Philadelphia-based Marshall, Dennehey, Warner, Coleman & Goggin.

However, that's not to say that Cozen O'Connor is always a bargain. Its rates for partners ranged up to $700, and its rates for associates go up to $395.

Cooley Godward was one firm that did not raise its highest rates, but its lowest rates for partners increased from $375 to $395 per hour and those for associates rose from $205 to $215.

Some firms that raised their highest rates also dropped their lowest rates, increasing the range of billing rates available.

"The ranges are going to continue to grow," Bower said. "You'll see a lot of pressure on the low end, whereas for the important or strategic work, the rates will also be high, but justifiable."

This was the first year in which the NLJ asked firms to provide average and median (middle number) billing rates for partners and associates. Firms were also asked to provide firmwide averages and medians. These rates provide a clearer idea of what a typical lawyer at a given firm charges. More than half the responding firms provided this information.

Of those firms, Orrick, Herrington & Sutcliffe boasted the highest firmwide billing average: $451. Washington-based Patton Boggs reported the highest firmwide median: $495. New York's Kramer Levin Naftalis & Frankel reported both the highest average and the highest median rates for partners, $598 and $590, respectively.