By MATT CHANDLER
Buffalo Law Journal

The hourly rates lawyers charge their clients will rise overall in 2010, a new national survey suggests.

The survey, conducted in November by Altman Weil Inc., targeted 688 law firms with 50 or more lawyers, asking how firms were approaching billing rates for the coming year. With 42 percent of the firms participating, respondents said they plan to raise billing rates by an average of 3.2 percent next year.

Despite a push for discounts from clients, they said, economic conditions and cost-of-living expenses have forced "modest" rate increases.

Locally, larger firms' plans regarding 2010 rates are a mixed bag. Managing partners at three of the city's five largest firms told us that they see relatively small rate increases as expected by their clients and not likely to have a negative impact on business in 2010. Two of those firms -- Damon Morey LLP and Lipsitz Green Scime Cambria LLP -- declined to discuss their billing practices.

"Our clients understand that we practice law to earn a living and that we need to charge a fair and reasonable rate," said Gary Schober, president and CEO of Buffalo's largest law firm, Hodgson Russ LLP. "Our rates, compared to other firms our size, are extremely reasonable, particularly if you start comparing us to other markets."

Several law firms and corporate lawyers contacted for this story declined to reveal the rates they charge their clients. A spokeswoman for Phillips Lytle LLP said the firm charges clients anywhere from $150 to $400 an hour for legal services, depending on factors such as the type of work and the experience level of the professional doing the work.

Edward Piwowarczyk, managing partner of Jaeckle Fleischmann & Mugel LLP, says his firm has seen an uptick in business not only across the country, but internationally.

"Sitting here where we are, with our rates and with our international clients, we have seen that (work) increase, because in these times, our rates look so much more favorable than the counsel they may use throughout the country," he said.

While many firms say they review billable rates annually, Piwowarczyk said at Jaeckle, such reviews are done every six months. After implementing what he called a "modest" rate increase this summer, Piwowarczyk said there are no plans for any rate increases at the start of the new year.

Several firms who participated in the Altman Weil survey reported larger and long-term clients requesting discounts on the billable rates. Piwowarczyk says his clients haven't asked for any breaks yet.

"It's a volatile situation out there, and lots of things can change," he said. "It's not to say that individual arrangements couldn't be made, but those scenarios haven't been presented to us at our door."

David McNamara, managing partner at Phillips Lytle, says his firm approaches rate increases "on a lawyer-by-lawyer basis."

"In the most simple terms," he said, "the objective is to charge no more or no less (than is required) to deliver the quality of service that our clients expect."

Any increases, he said, "are primarily a function of younger lawyers achieving a greater level of expertise.... Across the board, where we have those increases, they were very modest. I would say globally, it is something less than three percent."

The rising cost of legal counsel, coupled with the stagnant economy, has led to louder calls for alternative billing in the legal profession. Schober says it is a drum that has been banging for the 30 years he has been practicing law.

"The billable hour is a terrible way to charge for legal services, (and) at Hodgson Russ, we are open to alternative billing methodologies, but when all is said and done, those methodologies have their own issues too," he said. "Will this (the poor economy) be the final nail in the billable hour's coffin? Only time will tell, but I tend to doubt it."