Local Billing Rates on Par With L.A., Still Behind New York
Lee, Jessica C
Everyone knows Orange County isn’t cheap.
From real estate, fuel and labor to insurance and materials, the cost of doing business here continues to rise with companies ,doling out more cash for goods and services.
Lawyers’ fees are no exception.
The healthy economy of the past few years, increasingly complex work and added federal regulations have driven lawyer billing rates across the nation.
“Billing rates have increased nationally and Orange County is no exception,” said James Leipold, executive director of the National Association for Legal Career Professionals in Washington, D.C.
Local law firms are reticent to talk specifics about their billing rates, in part because they’re determined by practice area and what a client requires, according to the firms.
On average, billing rates can range from the low $200s an hour to more than $600 an hour, depending on the practice and the type of work.
The rates are on par with other metropolitan areas in California, such as Los Angeles, San Francisco and San Diego.
But that’s shy of what’s charged by some New York lawyers, whose billings are known to top $1,000 per hour.
“The price model that New York firms use to charge clients doesn’t fit in Orange County because die market here is more mid-level,” said William O’Hare, managing partner of Phoenix-based Snell & Wilmer LLP’s Costa Mesa office.
Firms in New York often deal with large financial institutions working on Wall Street O’Hare said. Firms here typically service a broader base of clients that includes a good amount of midsize companies, he said.
As a rule, global and national law firms charge more than the county’s homegrown firms, lawyers say.
“Having a presence in New York changes the character of the firm,” O’Hare said. “If you have a national firm with an office in New York charging clients $1,000 an hour, it makes sense for its West Coast office to charge higher fees than their regional competitors.”
Billing rates aren’t always determined by region.
“Practice areas are what drive billing rates,” said Debra Deem, managing partner of Buchalter Nemer in Irvine.
Different practice areas have higher premiums because the work is more complex or mere are fewer lawyers in them. Deem said.
Real estate work is largely regional. Rates can be lower because they follow property values, Deem said.
Practices with lower billing rates include labor, employment and estate planning, Deem said.
Higher premiums can be found in corporate securities work such as stock option investigations and class action lawsuits. Work related to investment banking, financing and mergers and acquisitions often require higher fees too, she said.
“These deals are usually very complex and attorney fees are considered a tiny fee of the company’s overall investment” Deem said.
Intellectual property is another practice area with higher fees.
“Companies are willing to pay top dollar to protect their ideas,” Deem said.
Bankruptcy work also has higher premiums because there’s a bigger risk of lawyers not getting paid and the wait time for payment usually is longer, according to Deem.
Competition keeps lawyer rates in OC competitive.
“There are so many law firms in Orange County,” said John O’Hara, partner at Newport Beach’s Newmeyer & Dillion LLP. “In order to stand out you have to go above and beyond for your clients so that they come back.”
Some global law firms publish their billing rates. Most law firms in OC don’t according to local lawyers.
Law firms base their pricing on what they see from competitors in court documents and by word of mouth, they said.
As potential clients shop around for legal services, they typically tell prospective providers how much other firms are charging. This helps law firms determine rates, Deem said.
Some companies will shop around for the best deal on fees. But many are willing to pay high legal fees, according to local lawyers.
“It’s common to see companies here that are willing to pay more for legal services because the stakes are high,” Snell & Wilmer’s O’Hare said.
Copyright CBJ, L. P. Jan 14-Jan 20, 2008
Provided by ProQuest Information and Learning Company. All rights Reserved
