The uptick follows a nearly two-year rate freeze, according to the report. Larger firms (1,000+ lawyers) anticipate a slightly higher average increase at 4 percent, while smaller firms are expected to raise rates by 3 percent.
“Although these results may seem to contradict some expectations for rate freezes in 2010, this is a relatively conservative rate increase by law firms that are struggling to balance their own business perspective with the needs of their clients.” said Altman Weil principal Tom Clay. “Most firms are making careful, considered increases – often client by client or lawyer by lawyer – unlike prior years when across the board increases were typical.”
“Law firms know that this is a buyers’ market.”
The study also solicited comments from participating firms. Among the reasons cited for why rate increases were necessary is the need to raise rates after a freeze of up to two years, increases for specific practices that are under-priced compared to the market, and increases for associates and junior partners to reflect their increased experience.
Altman Weil was founded in 1970 and provides management consulting services to firms.