Hourly rates at the richest law firms in Britain UK have doubled in the past 15 years, according to a new analysis of the top-end legal market reported in the Law Society Gazette of England and Wales.
The Gazette quotes legal-costs expert Jim Diamond as saying that rates for so-called ‘magic circle’ partners have now reached between Stg £1,000 and £1,500.
This compares with rates of between £625 and £700 charged in 2007, according to Diamond, who has taken regularly annual snapshots of the sector over the past two decades.
By comparison, according to the Bank of England, inflation has climbed 36% over the same 15-year period.
According to Diamond’s analysis, partners in US firms based in London charge between £950 and £1,350 an hour, while the top London firms outside the Magic Circle charge up to £900.
Newly qualified lawyers at Magic-Circle firms and US firms in London charge up to £600 an hour, while their London equivalents outside the Magic Circle have rates of between £300 and £450.
Judge questioned rates
The Gazette says that the rates suggest that firms’ costs are far in excess of what the judiciary might think appropriate to charge.
Earlier this year, Lord Justice Males publicly questioned a firm’s £1,100 hourly rate in a judgment, saying that if such sums were to be charged, there needed to be a “clear and compelling justification”.
The Gazette says that every one of the 22 top British firms to have published figures for 2021-22 has reported an increase in turnover – in all but one case of at least 5%.
Diamond points out that rates have increased significantly at the same time as firms have reported jumps in their turnover, and have started to pay newly qualified lawyers in excess of £100,000 a year.
The Gazette says that every one of the 22 top British firms to have published figures for 2021-22 has reported an increase in turnover – in all but one case by at least 5%.