At Priori, we help in-house legal departments find, hire and manage outside counsel without the costly infrastructure of a firm. Our clients use Priori’s vetted attorney network and streamlined technology platform for a wide range of legal needs. Data is a frustratingly rare commodity in the legal profession and at Priori, we’re aiming to change that. We’ve analyzed anonymized data from thousands of engagements on the Priori platform and identified a few notable takeaways, which we’ve released in a series of three blog posts.
The first piece dealt with the frequency with which fixed fees vs. hourly rates are used in our marketplace. In the second post, we analyzed the hourly cost of hiring a lawyer, both on the Priori platform and across the industry more generally. In this final installment, we examine how lawyers get compensated based on the number of years they have practiced. We hope these findings will be illuminating for both clients and lawyers seeking to understand how the market rewards experience in the legal profession.1
Key takeaway:
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For lawyers who have been hired on the Priori platform, each additional year of experience only adds an extra $2.15 to their hourly rate on average
The Value of Experience
The graph below shows the average hourly rates of Priori lawyers as compared to the number of years’ experience they possess. The blue line represents all Priori attorneys, whereas the red line illustrates the hourly rate for a lawyer hired on the Priori platform. For all Priori lawyers, every year of experience only adds an extra $2.29 to that lawyer’s hourly rate on average. For lawyers who have successfully matched with a client on the Priori platform, each year of additional experience adds $2.15.
In addition to illustrating that the lawyers who are hired on our platform are hired at slightly lower hourly rates than those who are not successful, our data raises questions regarding how much clients value years of experience when purchasing legal services. For instance, as seen below, the difference between the average hourly rate for a lawyer with 5 years experience and one with 15 is only $23.05.
Conclusion
While Priori’s data shows that experience does add value to a lawyer’s hourly rate, it does not add as much as one might imagine. This suggests that the hourly rate might not be the optimal pricing structure for veteran lawyers. Attorneys with more experience may benefit from thinking creatively about alternative pricing models. In particular, a move towards results-based fee arrangements and away from the hourly rate would likely provide more seasoned lawyers with compensation that better reflects their level of experience.
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1The “industry average” in this piece represents the amounts found in Clio’s 2017 Legal Trends Report, a comprehensive and exhaustive analysis using anonymized billing information from 60,000 lawyers. All prices in this piece are in USD and represent the cost per hour. Unless otherwise stated, “average” refers to the statistical mean.
2The average hourly rate for a hired Priori attorney regardless of experience is $241, and the average hourly rate for any attorney who has created a profile on Priori’s platform is $275.
