“[D]ifferences in billable rates are basically an accounting fiction”

Felix Salmon doesn’t think much of hourly rates at big firms:

In other words, differences in billable rates are basically an accounting fiction, which is used to come up with a calculable final figure to be presented as the bill, but which do not actually reflect the difference in value between various strata of lawyers. In order to do that, you’d be better off dividing annual income by, say, 2,500 [a reasonable number of billable hours in a year].

(1) When it comes to big firms, he’s probably right. Solo and small-firm lawyers probably aren’t working backwards from a target bill to an hourly rate. (2) His suggestion is a good one for determining what you are actually being paid. Pull out last year’s taxes, and divide by the number of hours you typically work in a year (2,500 is a good guess). [via Credit Slips]