Hildebrandt’s 2004 and 2005 U.S. Law Department Survey results for all participants show a 9% increase in billing rates for the top three billing firms over a two year period. The estimated rates increased from $298 to $325 an hour. The ratio of outside counsel spending as a percent of worldwide revenues increased 5% over the same year period (from 0.20% to 0.21%). The survey populations changed somewhat during the period, so neither pair of figure is exactly comparable.
What surprised me, knowing that outside counsel costs make up about 60 percent of a typical law department’s budget, was that total legal costs rose at half the rate of the departments’ key law firm’s rates. If you would like to know more about the Surveys, email my colleague, Lauren Chung.