August 22, 2007
Posted by Jeff Lipshaw
The Wall Street Journal leads the Marketplace section today with an article on the impending crossing of the $1,000 per hour rate for some of the top lawyers in some of the top New York City law firms, like antitrust guru (and former director of the FTC Bureau of Competition) Kevin Arquit (right) at Simpson Thatcher.
To me, it's just a number. As a GC, I was far more interested in total budgets and value-propositions than the hourly rate. So I could see ponying up an ungodly hourly rate for the certain few (like Kevin or his counterpart at Weil Gotshal, the handsome and debonair Steve Newborn) who could bring value to bear (Brackett Denniston III, the GC of General Electric allows as he has done the same). I scratch my head more at paying a litigator that much for two reasons: it piles up quickly, and I can only imagine a very few "bet the company" cases that would warrant fees at that level. Indeed, one of our strategies within the company was to bid out important but not mission critical work to high quality lawyers at non-financial center firms. As an example, we pushed much of our national products liability litigation to the Butler Snow firm in Jackson, Mississippi.
But the psychological impact of barriers like this - 1,000 internals on the Dow, the millionth customer, 75,000 discrete hits on SiteMeter - are interesting.
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We should have been seeing this earlier in terms of gradations of pay based on the complexity of the litigation, regulatory advice or transaction. To me the big questions GCs need to ask themselves is not whether individual partners are worth the money (they are) but based on limited legal budgets why they still send elite law firms anything but the highest end work.
Posted by: D. Daniel Sokol | Aug 23, 2007 5:28:59 AM