Half full or half empty?   That's my somewhat non-plussed reaction to the National Law Journal's release of its annual hourly billing rates update.  Of the 110 firms responding to the questionaire, 88 reported increases in partners' billing rates and 81 in associates' billing rates.  But here's the key take-away demonstrating the schizophrenia of this survey:

Akin Gump Chairman R. Bruce McLean said that even with this increase, the firm did not raise rates as high as the economy would have allowed this year. "We misjudged where the market was," McLean said. He explained that in most of the firm's practices, deciding where to set rates is often based on "vague and historic" information.
The firm's strategy, McLean said, is not to be a "market leader" in rates but to stay in the middle range of fees competitors are charging.
But determining where the high and low margins lie can be difficult.
"Most of the high-end firms still have problems with partners in increasing their rates to [match] the market," said Joel Henning, vice president and general counsel for Hildebrandt International, a law firm consultancy. As a result, he said, law firms sometimes shortchange themselves.
"Lawyers tend to be terrified of losing clients because of increased rates," he said.

Choose your poison: Rates rose, that's a fact, but not as much as "the economy" [read: the market] would bear, according to the supremely astute Bruce McLean of Akin-Gump, or else lawyers are "terrified" clients will desert if they keep this up.

I have a third theory:  Firms will raise rates at the high end where price is, essentially, no object; this is rational behavior and should be expected to continue in the teeth of economic upturns or downturns.  But the quoted rate, as all of us who live in New York and have been to the Lower East Side know, is not always the actual or realized rate. 

Revenue = [Billed Rate] - [Discounts + Writeoffs]

The survey, recall, asked for Billed Rate.  Caveat lector.