Expensive lawyers have gone mainstream

Expensive lawyers look to have gone mainstream with the Wall Street Journal reporting on US rates of $2,500 over the weekend

But, despite the grumblings from GCs quoted in the article that this unsustainable, is there anything new here?

The WSJ article seems to me reheating a piece from Bloomberg Law earlier in the year citing similar rates and trends

I recall similar grumblings at $2,000 an hour, $1,500 and $1,000, but the truth is that clients continue to pay increasing fees for complex, high-stakes work

Perhaps the aversion is more to round numbers than the year on year increases. Watch out for $3,000 in ~18 months' time!

From a law firm, and individual lawyer perspective, increasing hourly rates is more sustainable than increasing utilisation and billable hours targets in order to preserve gross margin and PEP expectations

For relatively price-inelastic practice areas, this is a sensible move

The real stories around rates will be found outside these top US law firms, as big law and then mid-market firms see the opportunity to increase their own hourly rates (albeit not to $2,500)

But whilst "we're cheaper than big US law" is a pricing strategy of sorts, it's not a particularly great one as it leaves firms exposed to others that are cheaper still; "we're cheaper than magic circle", "we're cheaper than silver circle" and so on...

And firms will need to be mindful of the expectation created by increases in headline hourly rates, for fee earner pay reviews

If fee earners are seeing 9% rate inflation in the Wall Street Journal, rightly or wrongly, that's going to be the expectation come salary review

Internal, as much as external, comms around rate increases are increasingly important