Partner charge-out rates at the top 10 City firms have breached the £500 per hour threshold for the first time.
Exclusive research conducted by The Lawyer has found that the prevailing hourly rates charged by partners in the City is between £500 and £550, while some magic circle corporate partners are understood to bill north of £600 per hour.
According to the research, a number of firms, including Allen & Overy, Freshfields Bruckhaus Deringer and Herbert Smith, increased their hourly rates at the start of the financial year, largely to take account of inflation.
Charge-out rates for associates range from £200 per hour for newly-qualifieds up to £440 per hour for their most senior peers. Trainees are charged out at between £145 and £170 per hour.
Charge-out rates for UK-qualified partners in the City arm of US firms are either lower or on par with their City counterparts. Partners at Shearman & Sterling bill clients £475 per hour, while partners at Weil Gotshal & Manges charge £455-£530 per hour.
The rise in hourly rates comes at a time when more clients are launching legal panels or approved law firm lists. The research also found that firms are increasingly moving away from charging clients hourly rates and are instead using bespoke billing structures to reflect the size and nature of individual deals. A number of firms now only use hourly rates for litigation and restructuring work.
One partner at a magic circle firm said: “Five years ago we would’ve told clients what our hourly rates are, but now they’re less bothered.”