Effective billing rates contrasted to blended billing rates – a mea culpa

I erred; I have misused the term “blended billing rate.” In previous posts about that term I have noted the difference between law firms (Aug. 21, 2005), the unclear connection between it and cost reduction (Sept. 5, 2005), and its correlation to firm size (Sept. 10, 2005). In each post, I meant by the term the total of several bills from a law firm divided by the number of lawyer hours covered by the bills.

“Effective hourly rate” more accurately describes what I was referring to. That term takes into account everyone who charges time as well as any write-offs by the firm and reductions by the law department. “Blended billing rate” more commonly denominates a method of billing by which a law firm agrees to bill a set amount per hour for all of its lawyers, or for some level of lawyers, such as $210 an hour for all associates. Sorry.

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