2017 Report of the Economic Survey

AIPLA Report of the Economic Survey 2017

INCOME RECEIVED IN 2016 AND PROJECTED FOR 2017, BILLING RATES, AND BILLABLE HOURS

Compensation was measured broadly by gross income, which includes salary, partnership income, cash bonuses, shares of profits, and deferred compensation. Also covered were retirement and savings plans, as well as, expected total cash income for 2017. In addition, for private practitioners, data were collected for billable hours, rates, and the amount billed for legal services. Findings are summarized below:  Increasing again in 2016, primary practice median gross income for all respondents was $246,000. It was $237,000 in 2014, and $210,000 in 2012. Private firm, partners reported a median income of $420,000. Similar to years past, this is the highest median income reported for all types of respondents, and is an increase compared to the 2015 and 2012 surveys – which were both below the level reported in 2008 ($415,000).  For those in private practice, the median 2016 income was $260,000 – an increase over the $250,000 reported for 2014, and the $225,000 reported for 2012. Median corporate practitioner income crept up to $243,000, which is a 1.3% increase over the income reported for 2014 ($240,000).  On this year’s survey, respondents were asked to report their year-end cash bonus. The median value reported for all respondents was $32,250. Solo practitioners and private firm, partners reported the highest median bonus – both reporting $70,000. The corporate IP department heads reported a median year-end cash bonus of $68,000.  The median employer contribution to 401(k) and 403(b) retirement & savings plans was $10,600. Solo practitioners reported a median employer contribution of $24,500, and private firm, partners reported $23,500.  The anticipated total cash income (median) for 2017 was $250,000 for all respondents, a modest 1.6% increase over the actual level reported for 2016. Private firm, partners reported the highest median anticipated income for 2017 ($418,500) reflecting a slight decline from the actual income reported for 2016 for this segment.  Median billable hours recorded for all individuals in 2016 was 1,500. This represents a continuing decline from the 1,580 median billable hours reported for 2014, and the 1,650 reported for 2012. Private firm, associates continue to bill the most hours (1,700, median). This figure is also lower than was reported in 2014 (1,750), and 1,805 in 2012. Private firm, partners, held steady at 1,500.  The median hourly billing rate for all attorneys has been increasing from $350 per hour in 2012 to $380 per hour in 2014, and now $400 in 2016.  The overall median dollar amount billed for legal services in 2016 was $513,000 – which is up 2.5% from the median value reported for 2014 ($500,286). The highest median amount was generated by private firm, partners ($600,500), followed by private firm, of counsel ($575,000). Similar to 2014, solo practitioners reported the lowest median amount billed, and was actually 7.0% lower than reported in 2014; $200,000 in 2016 compared to $215,001 for 2014.  Two thirds of billing by private practitioners was hourly in 2016. Private firm, of counsel reported that 73.5% of their services were billed hourly, and 60.1% of solo practitioners’ services were billed the same. Only 22.0% of private firm, of counsel’s billings were predetermined fees, compared to 31.2% overall.

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