Billing rates charged by firms in Dallas increased by 6.8 percent in 2015, compared with 2014—an increase second only to New York when considering the 25 U.S. cities with the highest volume of legal work. Rates increased by 7.9 percent in New York during the same period.
According to the 2016 Real Rate Report, issued by CEB consulting company and Wolters Kluwer NV's ELM Solutions, which helps in-house legal departments manage budgets, hourly rates in the United States increased 5.4 percent in 2015 compared with 2014, boosted by an average 7.5 percent increase at firms with more than 1,000 lawyers.
The average billing rate increase of 5.4 percent in 2015 is the largest increase since 2011, when the average increase was 5.3 percent, but less than rate changes of more than 8 percent in years before the 2008-2009 economic recession. While billing rates increased, the 2016 Real Rate Report finds that demand—the total hours billed by each firm—declined 8 percent from 2013 to 2015.
Dallas' 6.8 percent rate increase in 2015 compares with a 5 percent increase in Houston and a 3.5 percent increase in Austin, the two other Texas cities in the report.
Much of the increase in Dallas is attributed to higher rates charged by associates. Associate rates increased by 10 percent, while rates went up by only 4 percent for partners. The highest rate increase, 11 percent, was at firms with more than 1,000 lawyers, and M&A work posted the highest hourly rate increase of 18 percent, according to the report, which included 113,651 hours billed in 2015 to in-house legal departments by 914 lawyers at 103 firms.
In Houston, associate billing rates increased by 6 percent in 2015 and partner rates went up by 4 percent. The largest rate increases were at firms of 500 to 1,000 lawyers, with a 7 percent increase in 2015. The practice area of commercial litigation posted a 6 percent rate increase in 2015—the highest among practice areas. The results are based on 99,882 hours billed by 610 lawyers at 94 firms.