Clients pay $1,600 an hour after any discount as the highest rate in the market—a new all-time high for the top rate. And, this is not an isolated rate—more than a few clients report paying $1,600 per hour.
4 Figure Hourly Rates Officially Part of the Legal Landscape
38% corporate counsel report paying a top rate of $1,000 an hour or higher. The 4 figure HRP is clearly embedded in the legal landscape. The largest 30 law firms, including the Magic Circle firms, lay claim to 54% of clients paying the highest rates.
Clients say new and extreme risks make the top rates worth paying. Think monster transactions, global complexity, large scale FCPA and similar enterprise-level risk.
Top Rates Climbing for All Law Firms
The average HRP is $875 in 2015 across all law firms, up from $687 in 2012. 50% of corporate counsel report paying a top rate of $900 or more.
Most of the top rates being paid outside the largest 30 firms are for Transaction-related work.
2 Reasons Law Firms are Premium Rate Worthy
Clients think about two hiring factors when a super-premium need arises. The rate goes to the law firms demonstrating one of two qualities, in this order:
- A deep, well-developed and working understanding of the client and their business
- The best-perceived brand
Clients only recognize 24% of law firms as bringing this super-premium, rate-worthy level of understanding. These clients know exactly who they will hire if the super-premium need comes up. But 76% will look beyond their current roster of law firms for the best-perceived brand—unless you give them a reason not to.
The common ingredient in developing a super-premium worthy understanding of your client and their business is to talk regularly and often about your client’s business. Think monthly or at least quarterly.
Law firms who compete successfully in the super-premium segment invest heavily in understanding their client’s business better than anyone anywhere—this investment is the cost of acquiring premium work.
And, most importantly, your client will never see your deep understanding unless you share and discuss your insights with them—regularly. Your clients will want to teach you about their business once they see you are invested in them.
Your client will learn from you while you learn from your client. The more your client teaches you, the deeper your understanding goes. Without client input, clients will believe you know little about their business—leaving you outside the circle of firms tagged for premium rate status or leaving your client to pick the best-perceived brand.