Data from well over 100 law firms on average partner billing rates and law firm size (See my post of June 6, 2006 about scatter-grams and trend lines.) disclosed a clear correlation between hourly rates and firm size. With the firms sorted by number of lawyers, a trend line on the data points of a scatter gram revealed the pattern. More specifically, the formula for the trend line describes – and lets someone calculate – what a typical law firm would have as average partner rates by different sizes of law firms. Each additional 100 lawyers raised the average partner rate $13.
A similar analysis of associate rates found a narrower rate spread. In other words there was less variability in the associate billing rates (a smaller standard deviation) and the trend line’s equation showed that each 100 additional lawyers meant a $7 increase in associate rates.