A recent NLJ story by Abigail Adcox, “DC Litigators Outpaced All Other Cities on Billing Rates in 2023” reports on NALFA’s 2023 Litigation Hourly Rate Survey & Report. The story reads:
Washington, D.C., ranked as the city with the highest billing rates for litigation in 2023, according to a new survey from the National Association of Legal Fee Analysis.
A quarter of survey respondents in D.C., which included full-time equivalent litigators, both defense and plaintiffs counsel, fell within the highest tier, tier 4, with billing rates in the range of $951 to over $1,300, the highest percentage out of the 24 cities tracked.
Comparatively, in San Francisco, which had the second highest litigation billing rates last year, only 13% of respondents fell in tier 4, according to the survey.
“It’s top [litigation] billing city, and it’ll probably be so for the next several years. I mean, no one comes close to Washington in terms of billing and litigation,” said Terry Jesse, executive director of the National Association of Legal Fee Analysis, a nonprofit that undertakes fee analyses for courts and private clients.
A little over 2,000 attorneys in D.C. responded to the survey, including litigators practicing at large law firms, midsized law firms and solo practitioners. Overall, roughly 24,000 litigators participated in the survey across the U.S.
In D.C., of the 2,000 respondents, 101 reported billing rates between $1,201 to $1,300 and 97 reported billing rates over $1,300.
Overall, 2% of D.C. litigators fell within tier 1 billing rates (less than $450); 22% fell within tier 2 billing rates ($451-$700); and 51% fell within tier 3 rates ($701-$950).
Jesse indicated that the large presence of major law firms in D.C. was likely one reason for the region’s high billing rates. And the small percentage of billers in tier one may be attributed to higher associate starting salaries.
“Starting salaries have gone up. And thus there’s a correlation between compensation and rates. So what I think is going on is that first-year associates are starting their rates higher, more on the second tier,” said Jesse.
Overall in 2023, billing rate increases and demand helped D.C. firms end the year with a strong financial performance.
Average billing rates in the D.C. region rose 8.8% compared with the industry average of 8.3%, according to Wells Fargo’s Legal Specialty Group’s year-end survey results. Those results included eight firms headquartered in the D.C. region. That came as demand picked up in litigation and regulatory practices in the region.
Billing rate hikes aren’t expected to slow down in the near-future either. A recent survey showed that 86% of large firms in the U.S. and U.K. expect to increase billing rates over the next 12 months, with nearly a fifth of respondents expecting them to increase between 41% and 60%, according to reporting from The American Lawyer.