Just as the debate on hourly billing is heating up (see "Hourly billing: Presumed Unethical"), here come some cream-of-the-crop New York lawyers jacking their fees up to $1,000 an hour. These grand attorneys have crossed a previously unthinkable threshold, kind of like the sound barrier used to be. Nathan Koppel writes a terrific article in yesterday's Wall Street Journal, "Lawyers Gear Up Grand New Fees." (Subscription may be required.) As is common in Journal stories, the article's lede showcases Nathan's top-notch writing:
The hourly rates of the country's top lawyers are increasingly coming with something new — a comma.
The article has a great quote from an unnamed New York partner (whose own rate isn't disclosed): "We have viewed $1,000 an hour as a possible vomit point for clients." (Call it the client's "emetic rate.") Even David Boies, arguably the nation's top litigator, has misgivings: "Frankly, it's a little hard to think about anyone who doesn't save lives being worth this much money." (Boies charges $880 an hour.)
Some of the Grover-getters sniff that they're not overcharging at all:
Still, some lawyers are confident they're worth $1,000 per hour, and that now's the time to break the barrier. "I haven't personally experienced resistance to my billing rates," [Simpson Thacher litigator Barry] Ostrager says. "The legal marketplace is very sophisticated."
According to the article, law firms blame the rate increases on rising costs, such as $160,000-a-year salaries for first-year associates. Ironically, when interviewed about associate-salary increases, these law firms often say that they don't intend to pass it along to clients by raising rates. See Delaware Law Weekly, Apr. 21, 2006; Law.com, Mar. 20, 2006; ABA Journal Report, Feb. 2, 2007. Is the legal marketplace so "sophisticated" that it will overlook these earlier protestations?
My favorite quote in Nathan's article comes not from a law firm but from a potential customer of these high-priced services:
Considering a major-league baseball player can make the equivalent of $15,000 per hour, "$1,000 for very seasoned lawyers who can solve complex problems doesn't seem to be inappropriate," says Mike Dillon, the general counsel of Sun Microsystems Inc.
Compared to Alex Rodriguez's $25-million-a-year deal, these lawyers are a bargain.
For more reactions, see The Journal's "Law Blog Thousand-Dollar Bar"; Law.com — Legal Blog Watch's "Billing Rates Hit the $1,000 Mark"; Legal Profession Blog's "$1,000/hour? Nero has become managing partner and is fiddling away...." and "$1,000 per hour"; and Blawgletter's "The Hourly Fee Must Die."