What goes up, but never goes down? The answer to the old riddle
is "age", but it could just as well be "Big
Law's hourly rates".
If you have ever received a Big Law bill, you will have
experienced the bewilderment of valuing someone's time at
CAD$900 per hour. Or CAD$850. Or even CAD$590. Last year,
CounselLink reported that American Big Law's median billable
rates were US$706 for M&A files and US$608 for general
corporate and tax work (https://counsellink.com/trends/). This
situation is about the same here in Canada.
Big Law's black magic has always been pulling rabbits out of
hats - for its own amusement, and not the audience's.
But aside from sticker shock, where does that money go exactly?
One might assume that it goes to covering Big Law's higher
cost base. That is what we always thought. A few years ago, we
would have guessed that perhaps 40-50% of a billable hour
would go to cover Big Law's expensive tastes (e.g. high
lease payments, fancy offices,
