DIVING IN... Income and Billing Rates Results Explained
By Dan Wise
The complete survey reports are now available online.
The median income for New Hampshire attorneys - broken down by age group, practice area, region and firm size - can tell us a lot about the economic status of the professional and the state's legal market.
NH Lawyer Income Over Time
Over time, the speed of income growth for New Hampshire lawyers has fluctuated.
Between when the Bar Association conducted its 1984 economic survey and when it collected similar income data in 1989, median annual income among New Hampshire attorneys surged 37 percent, from $37,200 to $51,000 per year.
But income grew by only 8 percent in the following six years, reaching $55,000 by 1999. When the Bar Association again surveyed attorneys about their income in 2005, the median annual salary had increased 20 percent, to $75,000.
Since then, annual median income among lawyers in New Hampshire has again increased dramatically, reaching $100,000 in the most recent survey, an increase of more than 33 percent.
|Median Attorney Income
The median income in 2013 for full-time private practice attorneys was $100,000, according to the NH Bar Association Economics of Law Practice Survey, which collecting detailed financial information from more than 700 bar members, including government lawyers and in-house counsel. At $124,575, median income was higher for in-house counsel, but the highest paid private practice lawyers still earned more than the highest paid in-house counsel.
The median income for attorneys in New Hampshire is lower than the national average of $123,990, according to the federal Bureau of Labor Statistics. The federal median wage for New Hampshire attorneys is $94,670, slightly lower than the $100,000 median income reported in the survey results.
In the Bar Association survey, the median incomes reported varied widely depending on the type of lawyer - ranging from a low of $65,000 for solo practitioners in home-based offices to a high of $191,000 for partners in large firms with more than eight partners.
Looking at net income by levels of experience, median income ranged from $45,000 per year for lawyers with less than two years of experience, rising to $95,000 for lawyers with 11 to 15 years in practice, and topping out at $140,000 for those in practice 26 years or more.
How much attorneys earn also varies widely by practice area. Survey results showed that commercial litigators earn the most with a median income of $175,000. Seven other practice areas had median incomes higher than the overall median of $100,000. Those were corporate/business law, employment law (management side), intellectual property, medical malpractice, plaintiffs' personal injury, municipal law, and real property law.
Looking at income for all full-time attorney respondents, the practice areas with below-average pay were collections, general practice, family law, consumer law, and criminal law. All came in below the $100,000 line. In all but one of the practice areas that had few survey respondents (consumer law), attorneys reported annual earnings of more than $100,000. The highest area topped out at $250,000 for commercial trial practice.
This narrowing of the gap also appears when income is compared by size of firm for private practitioners. The median annual income for solo practitioner respondents was $75,000, well below the overall median of $100,000. For firms with more than 14 lawyers, median net income rises to $140,000. Looking at the those in the 75th percentile of earners, there is a narrowing, with the top 25 percent of solos earning an average of $140,000 and the top quarter of the large-firm category coming in at $212,000. Interestingly, while two-person law firms do relatively well on average, with a median income of $110,000 per attorney, the upside isn't as impressive, with the top 25 percent reporting an average income per attorney of $177,000.
It's no secret that attorneys in the less populated counties earn less than their counterparts in the more densely populated parts of the state. This survey, as well as past surveys, grouped New Hampshire's 10 counties into three groups: Region 1 includes the four smallest, northernmost counties - Carroll, Coos, Grafton and Sullivan. Region 2, the so-called “middle counties,” includes Belknap, Cheshire, Merrimack and Strafford. Region 3 includes the largest, most urban counties, Hillsborough and Rockingham.
Region 3, with New Hampshire's two most populous counties, reported the highest median income for full-time private practice lawyers at $104,000. The middle group wasn't far behind with a median of $100,000. Region 1 trailed with $87,500 in median annual income.
Income differences for the house counsel positions ranged depending on title, with the small group of senior counsel attorneys reporting well above the overall median at $165,000. Chief legal officer/ general counsel respondents reported a median income of $155,000.
Of the house counsel respondents, which made up about 12 percent of overall survey respondents, 25 percent earned more than $150,000 per year.
For government attorneys, the median annual income was reported at $74,000. In the categories of general government attorney, city government and public defender, the median income was above the overall median. County government and administrative law positons reported median salaries below the overall median.
Hourly Billing Rate Variations
The hourly billing rate continues to be the generally acknowledged pricing method used by attorneys and firms. Alternatives, such as flat-fee billing, have been promoted as potentially more efficient practices, but in 2014, few New Hampshire attorneys were making use of them, according to survey results.
The median billing rate reported was $225 per hour statewide, peaking at $250 in Hillsborough and Rockingham counties (Region 3). The average hourly billing rate was $225 in the middle counties and $200 in Region 1 (the northern counties). Looking at the top 25 percent of respondents' rates, the average reaches close to $300 in Region 3, $280 in Region 2, and up to $250 for Region 1.
By years in practice, median billing rates ranged from $185 per hour for new lawyers in practice one to two years to $250 per hour for the most experienced lawyers.
The rates also increase as the size of the firm increases. For solo firms, the average rate is $200 per hour. The average hourly rate is $273 at firms with more than 14 lawyers. As with incomes, however, the top 25 percent of respondents show a slightly different distribution, with the highest-earning solos and two-person firms averaging $250, outperforming small firms. Rates jump to $345 for the top 25 percent of firms with more than 14 lawyers.
Billing rates by practice area reflected a similar pattern to the measure of net income by practice area. The highest rates were reported by practitioners in litigation and business areas, while family law and general practice lawyers charged less than the overall median hourly rate of $225.
About the Survey
More than 700 New Hampshire attorneys answered all or part of the NH Bar Association's Economics of Law survey circulated last November to all in-state attorneys. (A small number of out-of-state attorneys did respond to the survey, but in most categories, there were not enough responses to report separately.)
There were slightly different questionnaires for lawyers in private practice, government lawyers, and in-house counsel. Seventy percent of the 714 respondents were in private practice (43 percent in firms, 27 percent solos). Government attorneys accounted for 18 percent of the respondents, and 12 percent were in-house counsel.
The survey was conducted by an independent research firm, Applied Statistics Laboratory, of Ann Arbor, Mich., which has conducted numerous similar surveys for bar associations over the years.
Larry Stiffman, the firm's president, offers the following caveats:
- The very largest firms in the state, and potentially among the highest paid (although not necessarily the most profitable) tended not to answer the income questions, so income numbers for the largest firms may be somewhat understated.
- Because this survey was circulated via email, there may be fewer responses from attorneys who don't like technology.
Including associates who work for solo attorneys, 35 percent of survey respondents were part of solo firms. That aligns closely with the 34.6 percent of NH Bar Association members who are working in solo firms.
Attorneys in smaller firms are slightly overrepresented among survey respondents compared to the membership statistics: 30 percent of the respondents were from firms with two to four attorneys, compared to 25 percent of membership coming from firms of this size. Sixteen percent of the survey's respondents were from medium-sized firms (six to 14 attorneys), and 19 percent were from firms with more than 14. Association membership statistics show that 31 percent of the membership comes from firms or organizations with more than 10 attorneys.
Response rates by region of the state were consistent with the distribution of members across the state. By age, response rates matched up closely with membership statistics. The majority of members (71 percent) are between 31 to 60 years old. However, the youngest attorneys - aged 24 to 30 - accounted for 15 percent of the survey responses, even though they comprise only 5 percent of total bar association membership.
Only 12 percent of survey respondents were from the 61+ age group, even though 23 percent of the membership is older than age 61. Women were slightly overrepresented in the survey: 40 percent of survey respondents were female, while women comprise 33.6 percent of the active-status membership.