Hourly Billing Rates

What to charge, negotiation & getting approval.

Cross-references and resources:

1. Policy: New Case Approvals & Retainers
2. Colorado Bar Association Economic Survey (2017)
3. Survey: Big 3 Denver law firms close on rates (2018)
4. Summary of Findings: Denver Law Firms (2010)

Example Rate Table

The rates shown in the table below are examples of rates that were in effect as of the date of publication of this Policy. The tables that can be downloaded from the links below are more frequently updated and control what should be quoted to potential clients unless deviations are authorized.

Our rates vary by client, and are usually discounted from our Standard Rates (our highest rates). The table below shows our Standard Rates and a few examples of market-driven rates we charge for some of our key clients. The table does not replace this Policy or the more specific rate tables to be used in quoting rates that can be downloaded using the links below. The information that follows  explains our approach to determining billing rates, which are typically negotiated on a client-by-client basis.

Quoting Tiered Rates To Potential New Clients

Our goal in negotiating rates is to forge agreements with clients—especially new ones—that come as close as we can get to our Standard Rates as possible (shown in the far right column in the table above) without losing a client opportunity or driving away prospective business. 

There is a danger that we can drive away a new client by quoting a rate that is too high, in which case we lose business. There is also the risk of quoting a rate that is too low, in which case we give up potential profit.

Judgment and skill in the process of negotiating rates are vital traits for a successful lawyer. All prosepective clients ask what our rates are. The temptation will be to quote Standard Rates (or very high rates) to everybody, but experience has taught us that most insurance clients and some private clients will expect to pay far less than our Standard Rates.

It would be wonderful if we had a crystal ball to tell us what a client is expecting or willing to pay, or information regarding the rates quoted by our competitors. There are many ways an attorney can glean insight and make reasonable assumptions. For example, when a prospective client initially discusses our rates with us, it is useful to learn what other firms a potential client has interviewed—many larger firms publish their rates, or their rates are available in third-party websites (though this latter source of data can be erroneous). It is often useful to begin a discussion with a client by asking what other law firms a potential client has contacted, and it is best to do so before specific discussion of our rates comes up. If a potential client has consulted with large firms before coming to us, it is often the case that the larger firms were charging a rate higher than the potential client is willing to pay. If the potential client has not spoken to any other firms, then knowledge of the client becomes more important than knowledge of what other firms are charging for similar work.

Specific Rate Tables To Drag And Drop Into Emails, Fee Agreements & Proposals

The five most common kinds of litigation clients, together with the most those clients are likely to be willing to pay, are:

Of course, any of these kinds of clients, as well as injured individuals, may wish to discuss contingency-fee agreements (discussed below). Our contingency fee rates generally range between 33% if the case is settled prior to trial and 40-50% if the case is tried to verdict. Our fee standard fee agreements contain a provision that authorizes us, but does not obligate us, to handle any appeal. When we are the appellee, we often charge no additional fee for handling an appeal, as we wish to preserve our fee interest, and most appeals are unsuccessful.

Large corporations and affluent individuals.

These kinds of clients are more likely to pay Standard Rates because they are generally familiar with the rates charged by very large firms (especially on both coasts), but many will balk or attempt to negotiate our rates, which we are generally willing to do, because our Standard Rates are our highest rates.

High-end insurers.

There is a significant spread of rates that various insurers will pay. Many specialty and large-loss insurers (who generally have policy limits of $1 million or more and charge high premiums to insure highly affluent insureds) will pay significantly higher rates because of the amount at stake in such cases.

One notable exception to this is Chubb, which covers large-loss events but shops its work to the cheapest firms available so long as they appear generally able to handle such claims. Chubb does retain larger firms for specialized case handling, in which case it generally retains firms not on its list of approved counsel. The approved panel counsel for Chubb are expected to charge lower rates in return for high-volume business, which is typical of other large-loss insurers as well. Nonetheless, the rates that can be quoted to other large-loss insurers will typically be around $150 higher than insurers who cover personal auto and premises liability or who issue primary policies with limits below $1 million.

Smaller corporations and businesses.

Smaller corporations and businesses will generally pay higher rates than insurance companies, but less than what can be negotiated with large corporations. Smaller corporations tend to produce fewer case assignments but can be the source of large and lucrative matters. When they have a lot at stake, particularly where the risk is not insured (as is often the case with employment and intellectual property claims, which are often excluded from CGL policies) because smaller entities often do not understand the need for special coverages despite the risk of being sued for specialized, non-insured claims. This type of litigation is often referred to as “bet the company” litigation, because a large verdict against the company can bankrupt it.

A small corporation facing claims of this nature will generally feel compelled to pay more for more capable legal counsel. These rates are very similar to our Specialty Rates, which are driven upward by the fact that specialty claims generally require skills other than merely litigation and trial expertise, such as deep knowledge of engineering, medicine, science and aerospace.

Low-end insurers.

These insurers include companies such as State Farm, American Family, Progressive, Geico, Allstate, who issue lower-limits automobile and homeowner coverage. Because these insurers tend to have comparatively less at stake than high-end insurers and corporations, they look for the cheapest lawyers they can find.

The advantage of having low-end insurers as clients is that they make case assignments in large quantities and are willing to let associates try cases, which is an invaluable source of experience and training. These advantages go a long way toward restoring the incentive to take this less lucrative work.

Specialized clientelle.

Clientelle working in specialized areas, while not always affluent or facing large-loss risks, will often pay more to a firm if that firm has a demonstrated level of skill in the specialized litigation areas mentioned above, such as medicine, science, engineering, aerospace, employment law and intellectual property. Our firm has labored for decades to build a reputation for bringing more of these specialized auxiliary skillsets to the handling of cases. Examples of such cases include both personal injury and commercial litigation, including licensing and other contractual disputes.

Ironically, most corporate clients will pay our Standard Rates for services other than litigation. Examples of such services include: tax advice and representation before the IRS, commercial transactions, regulatory compliance, drafting royalty and licensing agreements, corporate crisis management services, stock option planning and mergers and acquisition work.

Conclusion

There is an art to selecting rates, and the more you know about your potential new client, the better you will be able to judge and assess the right rates to quote.

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© Brett Godfrey 2020. All rights reserved. No portion of this material may be duplicated, disseminated or reproduced without express written permission from the author.