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The cost of law continues to soar in the US

Posted by: Michelle Bigler 23/05/16
Partner rates are a somewhat inevitable topic of conversation in legal circles wherever you are in the world you find yourself, but arguably nowhere more so than in the US, where, according to data from BTI consulting group, the rates charged by partners rose to an eye watering $2,000 an hour in 2015.

BTI’s research indicates that the highest hourly rate paid to the top partners at US firms increased by 25% in 2015, up from $1,600 a year earlier. The research, which was collected by interviewing counsels at companies grossing at least $1bn, represents what clients actually paid out.

The report suggests that these top rates are ‘outliers, but not exceptions’ with even more clustered around the $1,900 an hour mark. And these rates are expected to continue rising. Law firm management consultant Peter Zeughhauser predicted that once partners broke the $1,000 psychological barrier, rates would soon surge to $2,000 and now suggests they could continue to soar towards the $3,000 mark.

However it’s not just the rates for the top partners that are rising. A study from National Association for Law Placement suggests that the percentage of firms now paying the top rate for newly qualified lawyers is also on the up. The research found that 39 of the largest firms are now paying the top rate of $160,000 to newly qualified professionals, up from 27% in 2014. The research indicated that the top rate is most prevalent in the US’s legal hubs of Boston, Chicago, Los Angeles, New York and Washington. However the best destination for first years is New York where the James Leipold, executive director of National Association for Law Placement suggests the $160k starting salary is ‘almost universal’.

As pay in the US’ legal hot spots continues to eclipse other markets it’s likely that international firms will also look to increase remuneration in order to lure top legal talent away from the offices of high paying US firms – which is good news for legal professionals across the globe and not just in the US.
Tagged In: Global view, Law firms, USA
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