- 2021 was a block buster year for MNA legal fees. The median partner rate was $878 an hour… A 6.1% increase over the prior year median.
- Law firms continue to increase hourly rates and in-house legal departments are paying them. 2021 partner rates increased 3.4% over 2020.
- Alternative for your arrangements are increasing but not disrupting the market. Only 14.8% of matters had even a portion of their billing rate set at some thing other than hourly. Only 9.6%
of all billings were non-hourly fees.
- The largest 50 firms account for the largest share of in-house counsel spending. 46% of all outside counsel fees were paid to those 50 firms
- Partners in mergers and acquisitions, finance loans and investments, and regulatory compliance commanded the highest partner rates.
- Another trend that continued is law firm consolidation, with nearly 60% of companies consolidating 80% or more of their legal work with 10 or fewer law firms.
The 26 Page report is full of charts illustrating the changes in hourly rates across firms practice specialties.
It is no surprise that the report documents the concentration of routine commoditized work going to the smallest firms. Most importantly, it also includes pages of explanatory notes on how the data was analyzed.
Will the recession change anything?
The report confirmed that the pandemic drove up law firm revenue through 2021. What can we expect for the coming year? Will outside counsel react to the skyrocketing associate salaries with some pushback? Will the recession drive an increase in AFA‘s. At some point will outside counsel ask law firms to pass on some cost savings as a transition to remove work reduces real estate costs. Real estate savings may take years to develop but in the long term it is likely to be a factor that firms can use to demonstrate a competitive advantage..