Magic circle hourly rates hit all-time high of £850

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  • Gotta keep feeding the beast....

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  • I don't think that Jim Diamond has had access to some of the rates that I have seen in the past, some of which are in excess of than the hourly figures he has mentioned.
    As for in house counsel, are they not just covering their backs by outsourcing to the biggest and well known firms?

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  • Why are buyers of legal services paying up to 15% more? People really can't work it out? It's called cover your ass - everybody does it. If you go to a cheaper firm, they screw up, you will get the blame for not choosing magic circle. If a magic circle firm you chose screws up, you just say it's not your fault because you've chosen the best. It's not your money you're spending, so why take the risk when you don't have to. Like it or not, that's why the big professional service firms continue to get plenty of work. They may be better, but are they really that much better? In the corporate world, it's often about making sure the finger is not pointed at you when something goes wrong.

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  • So what? If the mighty in-house counsel think that the service is worth less than £850, then let them go hire some cheaper lawyers... then they can see whether they think the discount was worth it. There's barely a lack of competition out there.

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  • Didn't Jim Diamond sing "I should have known better"?

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  • I have seen rate card rates well in excess of £850 as far back as 2008.

    Also, get it in perspective. Plenty of Big 4 accountancy partners in Leeds/Manchester/Birmingham (never mind London) have rate card rates of £1,000+ per hour.

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  • This just proves the level of delusion and arrogance that the legal profession has. Are you really saying that it is okay to charge £850 an hour?
    So a major corporate can hire a heavyweight team of lawyers paying over the odds, whereas SME businesses are locked out of the judicial system unable to afford legal representation. It's little wonder that banks like RBS stand accused of abusing their power because we have a two-tiered legal system that delivers justice for those that can afford it.
    And here we have lawyers who are proud of the fact that they are able to charge £850 an hour. Boasting that in fact these rates are quite low. Maybe the government can't step in but this is a moral outrage.

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  • Over the last 15 years, with its lazy focus on superficial matters, the legal press has instilled in the profession and its clients a linkage between quality, profit and success that has done it a massive disservice. If we could just lose the idea that you have to be in a "top" city firm and make huge profits to be "good" and "sucessful" then some of us would happily join firms that didn't charge so much without being regarded as second rate or losing work within their area to less good but more expensive competition.

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  • Everyone know that MC lawyers are worth the money. It is those clients who pay slighly less for second tier firms, which are nowhere near MC quality, that are the ones getting screwed. You get what you pay for. Peanuts/monkeys, etc.

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  • "peanuts/monkeys, etc" [and jelly beans in the board room]

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  • @ 12:57: Hear! Hear!

    @ 1:11 Should that be "pay slightly less" or "pay slyly less"? No one "know" what you mean!

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  • Not for much longer! The myth that the "magic circle" are better hands down than the silver circle, upper mid tier, and specialist boutiques is utter nonsense, and the market is acutely aware of it, hence many of the aforementioned firms encroaching on what was historically MC terriotry. The MC need to perpetuate this myth, by keeping rates artificially high. After all they have a huge fixed cost base to meet, and expensive , generally underperforming overseas offices to support in their quest for global domination. I know for a fact, and often use it as leverage when considering top ten firms hourly rates, that one can without any hesitation, reduce 1/3rd of the headline rate , as a starting point. For the sheer audacity and the insult to my intelligence, I then trot of to firms like Macfarlanes, who quote a good rate, for outstanding lawyers, and levels of service led by partners, whose charges are still better value than the MC, and whos eservice levels are unsurprassed, coupled with their commercial nous. Wake up MC!

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  • How does it work at Slaughters, the most profitable of the MC firms? Do they even have hourly rates? I heard they just present a bill, entirely unitemised with no narrative which could have been arrived at on any basis with the client none the wiser.

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  • In my many years as a lawyer, in-house and in large and medium sized firms I have met brilliant lawyers in smaller firms and doughballs in MC/SC Firms. The truth is every Firm has its share of good, bad or indifferent lawyers, it's merely a question of ratios. The comments about in-house counsel "back-covering" are accurate in my experience, although there are other considerations such as specialty/expertise and resource. If I had a big concern about MC/SC Firms it was around how far down the chain work was delegated and how well it was supervised, particularly in view of the ludicrous hours they work their staff.

    Lastly, as is quite often the case, you sometimes pay for the name. Believe it or not, I remember an MD boasting how expensive his City lawyers were on an IPO. He thought it reflected on his own importance. In London, it appears inflated egos are like anuses - everyone has one .

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  • Well I've seen some bills from PI claimant "lawyers" who are 'charging' £268 per hour for unqualified and unadmitted staff; but they would reduce this to £240 'in the spirit of compromise' so I guess £850 ph isn't a ramp.

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  • The fluctuations over the years show that the rates are determined by what the market will bear and not the value of the advice given.

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  • It is these very few firms charging extortionate rates which give the rest of the profession who scratch around to make a living a bad name. I am a sole Practitioner yet my friends all believe I charge £300 per hour and take home circa 80% of this. The reality is, as with others, far from the accurate position. For me to achieve such lucrative earnings I would need to hold up a few MC firms before reciting another one of Jim Diamond's phrases "hi ho Silver" as I scarpered....

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  • As a US firm partner, I have been sitting across the table from British/international firms for 15 years; and, in my opinion, there is a very significant difference between 'MC' partners and associates and their counterparts at 'SC', second-tier and third-tier firms, both in terms of professional knowledge, dedication and business sense.

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  • (cont.)

    There are, in fact, different leagues. Of course you will meet the occasional mediocre lawyer at a MC firm and the occasional outstanding lawyer at a less prestigious firm, but on average there is no question than MC firms. Same thing in the US in terms of the top 10 Wall Street firms and all the rest. If you have ever negotiated a deal with a firm like Skadden (to use a firm other than my own), you will know what I am talking about. And if I were to become a client / consumer of law firm services, I would definitely know that too.

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  • As a buyer of legal services, I take issue with the suggestion that it's our "ignorance and arrogance" that are the problem. As with any business decision, there are a number of different factors to weigh up. The idea that it doesn't matter because it's not "our" money is offensive to most of us who are acutely conscious of the need to bring value to the businesses that pay our salaries. We will often try to do as much as we can in-house, saving the company money, and only outsource the really specialised stuff. Accordingly, MC charge rates *are* a deterrent, but there are other considerations also:

    (1) I'd rather pay £850 p/h for succinct advice from someone at the top of their game than pay a third of that for blather from someone who doesn't know what they are talking about.
    (2) I don't want an associate learning on the job, who needs everything explained to them, to be charged as if they were giving partner-level advice. They aren't.
    (3) If I have a good relationship with the partner, and they have made the effort to get to know my business, that goes a very long way.
    (4) I don't care how senior or how experienced you are, or even how excellent your advice: if you patronise me because I'm a woman (and it still happens, sadly), you and your firm will never get my business again.

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