Billing rates understandably increase as lawyer’s specialization increases

In-house attorneys gnash their teeth at partner rates that near the $1,000 mark, but those rates at least partially reflect specialization. As they become more experienced, specialists can more it readily recognize patterns and apply familiar tools so they are more efficient than generalists. Pattern recognition dramatically increases efficiency (See my post of Nov. 6, 2006: experts spot patterns; Nov. 26, 2006: memes are mental patterns; Dec. 16, 2005: ethnographers identify patterns in behavior; and March 27, 2009: pattern recognition as a cognitive bias.).

If one partner takes 90 minutes to solve a problem and charges $500 an hour, it is fair to the law department for the more specialized partner who takes 60 minutes (50% less time) to charge $700 an hour (40% more). If this generally prevails, then the best law firms, being those with the most experience, are the most cost competitive if staffing and work patterns are held constant.

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