Top law firms appear to be sensitive to corporate clients’ price concerns, a review of billing rates shows. 

Just under 35% of the blended hourly rate charged by the biggest firms in the United States was for work done by partners, compared to about 44% for firms at the smaller end of Am Law 100 firms, according to an analysis of 2023-2024 law firm rates by e-billing and matter management company Brightflag and legal outsourcing company Priori. 

That difference in partner work suggests the biggest firms are having associates and other lower fee-earners like paralegals do a larger percentage of the work to help keep rates down. “This [split] likely reflects the sensitivity of in-house teams that engage the top 50 firms to their high partner rates, which can be twice as high as the rates charged by partners in the bottom 50 firms,” the analysis says. 

For the typical matter, the percentage of work done by a partner in an Am Law 25 firm is 34.64%, compared to 35.85% at an Am Law 50 firm. 

That percentage tends to go up as the size of the firm goes down because the smaller the firm, the less per-hour that partners charge for their work. For an Am Law 75 firm, the partner’s work share is 39.16%, compared to 43.60% for an Am Law 100 firm. 

That’s an almost 9 percentage point difference between the top and bottom rungs of the Am Law 100.

For companies that want to gain some control over their outside counsel spend, one strategy is to negotiate with their firms over what the mix in the blended rate should look like. 

“It is particularly impactful to monitor the proportion of time partners bill on matters compared to other fee earners, since partners charge so much more than other fee earners,” the analysis says. 

Increasing costs

In-house counsel have reason to find ways to get their legal costs down because billing rates of the Am Law 100 firms jumped by 10% between 2023 and 2024, to a typical blended hourly rate of $1,057, up from $961. That’s the most significant annual increase in three years, the report says. 

In addition to size, the location of the firm determines how much corporate clients pay. New York law firms, for example, are by far the most expensive, with partners charging a typical $1,525 per hour compared to partners in a regional firm, like one in Kansas City, where partners typically charge $675, a difference of $835 an hour.  

The specialty work of the firm is also a price factor. Mergers and acquisitions tend to command the highest costs — $1,680 per hour per partner for an Am Law 25 firm.

Other types of work are expensive, too. For the biggest firms, partners charge a typical hourly rate of $1,565 for corporate work, $1,485 for litigation and $1,125 for intellectual property work.

By getting a handle on how much they’re paying for each type of work and by whom the work is being done, corporate counsel can come to a negotiation armed with data, the report says.  

“In-house teams can have strategic conversations with their law firms about acceptable rate increases, and can also create an engagement strategy that generates cost efficiencies,” the report says. “You don’t have to accept blanket rate increases. Have … discussions with your firms if the proposed rate increases seem excessive — especially if you have the data to back it up.”