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Charge-out rates for employed solicitors, June 2016

27 July 2016

The New Zealand Law Society has compiled information on charge-out rates for employed lawyers in private practice, at June 2016.

Image of Chargeout  

The information has been obtained from a question on charge-out rates in the 2016 New Zealand Law Society Hays Legal Salary Survey. The results of the salary survey are still being analysed and will be reported on separately when available.

The charge-out rates question drew a response from 21% of lawyers employed (ie, not partners or directors) in law firms located in New Zealand.

The data has been manipulated to remove extremes. An average and median rate from all the data provided is given for each post-qualification experience (PQE) year. A trimmed mean has also been calculated by removing the top and bottom 10% of rates from each PQE year. The range given has removed the top and bottom 10% of rates to ensure a more representative picture.

It is important to note that the rates are indicative only. They do not include GST or disbursements. It is clear that charge-out rates vary widely and factors such as experience, skill, time at a particular firm or practising in a particular field, location and type of work involved will all have an impact on charge-out rates. It also appears that charge-out rates vary according to gender (see LawTalk 893, pages 36-37).

Another factor to consider is that the assigned charge-out rate may also not be the rate at which a particular client is charged. The 2015 Waikato University Management Research Centre Interfirm Comparison found that the realised charge-out rate for senior solicitors was 79.9% of the average full charge-out rate. The rates given below are the full charge-out rates.

Many law firms are also now moving to a value billing model which places less importance on a particular lawyer's charge-out rate.

The information below shows data where there were 10 or more lawyers responding for a particular category.

Employed Lawyer Hourly Charge-out Rates, All New Zealand June 2016 (GST and disbursements not included)

Years PQEAverage*Median*Trimmed Mean**Range***
0 to 1 $            206.33  $           200.00  $                     202.12  $150-$290 
2 $            241.52  $           220.00  $                     237.01  $170-$340 
3 $            262.00  $           240.00  $                     252.60  $180-$380 
4 $            291.01  $           280.00  $                     287.50  $200-$410 
5 $            301.88  $           280.00  $                     294.19  $230-$420 
6 $            327.31  $           325.00  $                     326.00  $220-$450 
7 $            322.62  $           300.00  $                     309.54  $250-$420 
8 $            323.11  $           300.00  $                     315.33  $230-$475 
9 $            339.49  $           310.00  $                     326.77  $250-$500 
10 $            365.86  $           325.00  $                     358.48  $265-$525 
More than 10 $            362.39  $           350.00  $                     353.04  $265-$490 
Total $            292.70  $           280.00  $                     284.68  $150-$525 


*For all responses to survey question.

**Average of the 10th percentile to the 90th percentile. Calculated by removing the top and bottom 10% of rates from each PQE year.

***Rates from the 10th percentile to the 90th percentile. 

Charge-out by PQE and size of law firm

The following information shows the survey results sorted by years of post-qualification experience (PQE) by size of law firm. There were fewer than 10 respondents for some categories and an average only has been shown for these.

Large law firms (More than 20 lawyers)
Years PQEAverageMedianTrimmed Mean** Range*** Highest
0 to 1 $            243.86  $           250.00  $                     244.22  $175-$315 $350
2 $            270.86  $           260.00  $                     268.90  $180-$360 $425
3 $            318.21  $           340.00  $                     318.23  $200-$440 $495
4 $            331.25  $           320.00  $                     330.47  $240-$420 $510
5 $            362.38  $           380.00  $                     354.41  $265-$450 $535
6 $            355.23  $           362.50  $                     353.61  $240-$450 $500
7 $            354.88  $           325.00  $                     346.92  $300-$430 $500
8 $            416.15  $           400.00  $                     414.55  $320-$530 $530
9 $            388.33  $           355.00  $                     386.56  $285-$530 $550
10 $            415.00  $           415.00  $                     414.58  $320-$525 $535
More than 10 $            415.84  $           400.00  $                     413.61  $300-$525 $620
Total $            336.15  $           325.00   $175-$525 $620

Medium law firms (5 to 20 lawyers)
Years PQEAverageMedianTrimmed Mean** Range*** Highest
0 to 1 $            175.18  $           180.00  $                     175.12  $150-$220 $280
2 $            222.59  $           210.00  $                     218.30  $180-$275 $375
3 $            226.08  $           230.00  $                     225.34  $175-$275 $300
4 $            256.06  $           250.00  $                     255.74  $195-$330 $390
5 $            266.46  $           250.00  $                     262.75  $200-$345 $375
6 $            314.94  $           330.00  $                     323.75  $240-$385 $425
7 $            318.41  $           300.00  $                     299.17  $250-$375 $740
8 $            288.33  $           280.00  $                     279.41  $250-$320 $475
9 $            300.83  $           287.50  $                     293.21  $250-$360 $450
10 $            332.50  $           312.50  $                     313.13  $280-$350 $555
More than 10 $            331.85  $           330.00  $                     329.32  $255-$400 $480
Total $            269.80  $           260.00   $150-$400 $740

Small law firms (Less than 5 lawyers)
Years PQEAverageMedianTrimmed Mean** Range*** Highest
0 to 1 $            189.17  $           175.00  $                     183.25  $150-$300 $320
2 $            194.89  $           200.00  $                     191.53  $150-$250 $300
3 $            224.06  $           222.50  $                     224.17  $180-$275 $290
4 $            252.00  $           260.00  $                     255.00  $200-$300 $300
5 $            269.38  N/A  N/A  N/A N/A
6 $            267.86  N/A  N/A  N/A N/A
7 $            265.63  N/A  N/A  N/A N/A
8 $            200.00  N/A  N/A  N/A N/A
9 $            278.33  N/A  N/A  N/A N/A
10 $            295.00  N/A  N/A  N/A N/A
More than 10 $            293.00  $           300.00  $                     295.63  $220-$350 $450
Total $            242.13  N/A N/A N/A N/A


Charge-out rates by location and size of law firm

The following information shows the survey results sorted by the lawyers' place of work and size of law firm.

Auckland: All lawyers by size of law firm
Firm SizeAverageMedianTrimmed Mean** Range*** 
Small (<5 lawyers) $            248.54  $           250.00  $                     247.27  $150-$350 
Medium (5-20) $            289.56  $           280.00  $                     280.04  $180-$400 
Large (>20) $            351.19  $           340.00  $                     359.64  $215-$535 
Total $            313.52  $           300.00  $                     307.30  $150-$535 

Christchurch: All lawyers by size of law firm (fewer than 10 responses for small law firms)
Firm SizeAverageMedianTrimmed Mean** Range*** 
Small (<5 lawyers) $            246.25  $           255.00  N/A  N/A 
Medium (5-20) $            256.14  $           250.00  $                     258.33  $150-$350 
Large (>20) $            290.09  $           280.00  $                     283.98  $195-$400 
Total $            272.80  $           250.00  $                     270.47  $150-$400 

Hamilton: All lawyers by size of law firm (fewer than 10 responses for small law firms)
Firm SizeAverageMedianTrimmed Mean** Range*** 
Small (<5 lawyers) $            227.78  $                    -    N/A  N/A 
Medium (5-20) $            246.66  $           230.00  $                     242.50  $160-$350 
Large (>20) $            296.36  $           300.00  $                     301.58  $190-$375 
Total $            264.89  $           250.00  $                     269.72  $150-$375 

Rest of North Island: All lawyers by size of law firm
Firm SizeAverageMedianTrimmed Mean** Range** 
Small (<5 lawyers) $            245.38  $           250.00  $                     243.06  $150-$300 
Medium (5-20) $            245.67  $           250.00  $                     245.68  $160-$360 
Large (>20) $            291.36  $           285.00  $                     293.06  $225-$360 
Total $            253.09  $           280.00  $                     252.69  $160-$360 

Rest of South Island: All lawyers by size of law firm
Firm SizeAverageMedianTrimmed Mean** Range*** 
Small (<5 lawyers) $            210.44  $           214.00  $                     209.86  $150-$280 
Medium (5-20) $            248.57  $           250.00  $                     250.90  $175-$320 
Large (>20) $            250.33  $           220.00  $                     238.33  $180-$320 
Total $            240.40  $           250.00  $                     239.52  $150-$320 

Wellington: All lawyers by size of law firm
Firm SizeAverageMedianTrimmed Mean** Range*** 
Small (<5 lawyers) $            257.50  $           245.00  $                     252.50  $200-$350 
Medium (5-20) $            281.70  $           280.00  $                     275.41  $185-$365 
Large (>20) $            372.83  $           360.00  $                     372.35  $250-$515 
Total $            324.92  $           325.00  $                     322.66  $185-$515 


Gender

The information received from the survey also indicates that there are consistent differences between charge-out rates according to gender. There are obviously many possible explanations for the differences. However, the proportion of female and male respondents who made up each of the categories was relatively consistent (for example, 14.5% of women and 14.4% of men who responded were in small firms, 15.7% of women and 15.4% of men had two years' PQE, and 43.6% of women and 44.2% of men worked in Auckland). A higher proportion of male respondents were from large firms, while a lower proportion were from medium-sized firms.

Average charge-out rates by gender by years PQE, all lawyers
Years PQEFemale AverageMale AverageTotal AverageFemale as % of Male
0 to 1 $             199.49  $            216.70  $                206.33 92.1%
2 $             237.97  $            248.33  $                241.52 95.8%
3 $             252.46  $            277.64  $                262.00 90.9%
4 $             278.04  $            316.96  $                291.01 87.7%
5 $             287.89  $            359.09  $                301.88 80.2%
6 $             300.00  $            364.68  $                327.31 82.3%
7 $             327.65  $            304.00  $                322.62 107.8%
8 $             310.60  $            349.17  $                323.11 89.0%
9 $             342.22  $            333.33  $                339.49 102.7%
10 $             350.83  $            390.45  $                365.86 89.9%
10+ $             355.28  $            374.33  $                362.39 94.9%
Total $             285.54  $            306.12  $                292.70 93.3%

Average charge-out rates by gender by location, all lawyers
LocationFemale AverageMale AverageTotal AverageFemale as % of Male
Auckland $             304.70  $            329.86  $                313.52 92.4%
Christchurch $             263.36  $            294.55  $                272.80 89.4%
Hamilton $             266.67  $            262.05  $                264.89 101.8%
Rest of NI $             254.20  $            251.04  $                253.09 101.3%
Rest of SI $             230.93  $            258.03  $                240.40 89.5%
Wellington $             316.43  $            340.10  $                324.92 93.0%

Average charge-out rates by gender by size of law firm, all lawyers
Firm SizeFemale AverageMale AverageTotal AverageFemale as % of Male
Small (<5) $             236.32  $            253.11  $                242.13 93.4%
Medium (5-20) $             266.55  $            276.85  $                269.80 96.3%
Large (>20) $             326.91  $            351.27  $                336.15 93.1%

Last updated on the 2nd September 2016