EXHIBIT 2

Case 3:17-cv-00849-VC Document 83-3 Filed 09/06/18 Page 1 of 4
On Sale: The $1,150-per-Hour Lawyer --- Legal Fees Keep Rising, but Don't 

Believe Them; Clients Are Demanding, and Getting, Discounts

The Wall Street Journal

April 10, 2013 Wednesday

Copyright 2013 Factiva ®, from Dow Jones

All Rights Reserved

Copyright © 2013, Dow Jones & Company, Inc.)

Section: Pg. B1

Length: 1047 words

Byline: By Jennifer Smith

Body

Top partners at leading U.S. law firms are charging more than ever before, yet those hourly rates aren't all they 

appear to be.

Having blown past the once-shocking price tag of $1,000 an hour, some sought-after deal, tax and trial lawyers are 

commanding hourly fees of $1,150 or more, according to an analysis of billing rates compiled from public filings.

But, as law firms boost their standard rates, many are softening the blow with widespread discounts and write-offs, 

meaning fewer clients are paying full freight. As a result, law firms on average are actually collecting fewer cents on 

the dollar, compared with their standard, or "rack," rates, than they have in years.

Think of hourly fees "as the equivalent of a sticker on the car at a dealership," said legal consultant Ward Bower, a 

principal at Altman Weil Inc. "It's the beginning of a negotiation. . . . Law firms think they are setting the rates, but 

clients are the ones determining what they're going to pay."

Star lawyers still can fetch a premium, and some of them won't budge on price. The number of partners billing 

$1,150-plus an hour has more than doubled since this time last year, according to Valeo Partners, a consulting firm 

that maintains a database of legal rates pulled from court filings and other publicly disclosed information. More than 

320 lawyers in the firm's database billed at that level in the first quarter of 2013, up from 158 a year earlier.

That gilded circle includes tax experts such as Christopher Roman of King & Spalding LLP and Todd Maynes of 

Kirkland & Ellis LLP, intellectual-property partner Nader A. Mousavi of Sullivan & Cromwell LLP, and deal lawyers

such as Kenneth M. Schneider of Paul, Weiss, Rifkind, Wharton & Garrison LLP.

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On Sale: The $1,150-per-Hour Lawyer --- Legal Fees Keep Rising, but Don't Believe Them; Clients Are 

Demanding, and Getting, Discounts

Those lawyers and their firms either declined to comment or didn't reply to requests for comment.

When corporate legal departments need a trusted hand to fend off a hostile takeover or win a critical court battle, 

few general counsels will nitpick over whether a key lawyer is charging $900 an hour or $1,150 an hour. But for 

legal matters where their future isn't on the line, companies are pushing for -- and winning -- significant price 

breaks.

"We almost always negotiate rates down from the rack rates," said Randal S. Milch, general counsel for phone giant 

Verizon Communications Inc. The result, he said, is a "not-insignificant discount."

For the bread-and-butter work that many big law firms rely on, haggling has become the norm. Many clients grew 

accustomed to pushing back on price during the recession and continue to demand discounts.

Some companies insist on budgets for their legal work. If a firm billing by the hour exceeds a set cap, lawyers may 

have to write off some of that time.

Other clients refuse to work with firms who don't discount, lopping anywhere from 10% to 30% off their standard 

rates. Some may grant rate increases to individual partners or associates they deem worthy. Another tactic: locking 

in prices with tailored multiyear agreements with formulas governing whether clients grant or refuse a requested 

rate increase.

In practical terms, that means the gap between law firms' sticker prices and the amount of money they actually bill 

and collect from their clients is wider than it has been in years.

According to data collected by Thomson Reuters Peer Monitor, big law firms raised their average standard rate by 

about 9.3% over the past three years. But they weren't able to keep up on the collection side, where the increase 

over the same period was just 6%.

Firms that used to collect on average about 92 cents for every dollar of standard time their lawyers worked in 2007, 

before the economic downturn, now are getting less than 85 cents. "That's a historic low," said James Jones, a 

senior fellow at the Center for the Study of the Legal Profession at Georgetown Law.

To be sure, the legal business has picked up since the recession, when some clients flat-out refused to pay rate 

increases.

In the first quarter of 2013, the 50 top-grossing U.S. law firms boosted their partner rates by as much as 5.7%, 

billing on average between $879 and $882 an hour, according to Valeo Partners. Rates for junior lawyers, whose 

labors have long been a profit engine for major law firms, jumped even more.

While some clients resisted using associate lawyers during the downturn, refusing to pay hundreds of dollars an 

hour for inexperienced attorneys, the largest U.S. law firms have managed to send the needle back up again. This 

year, for the first time, the average rate for associates with one to four years of experience rose to $500 an hour, 

according to Valeo.

The increases continue the upward trend of 2012, when legal fees in general rose 4.8% and associate billing rates 

rose by 7.4%, according to a coming report by TyMetrix Legal Analytics, a unit of Wolters Kluwer, and CEB, a 

research and advisory-services company. Those numbers are based on legal-spending data from more than 17,000 

law firms.

More than a dozen leaders at major law firms declined to discuss rate increases on the record, though some said 

privately that the increase in associate rates could be caused in part by step increases as junior lawyers gain in 

seniority.

Joe Sims, an antitrust partner at Jones Day and former member of the firm's partnership committee, said clients 

don't mind paying for associates, as long as they feel they are getting their money's worth.

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On Sale: The $1,150-per-Hour Lawyer --- Legal Fees Keep Rising, but Don't Believe Them; Clients Are 

Demanding, and Getting, Discounts

Sophisticated clients, he said, tend to focus on the overall price tag for legal work, not on individual rates. "They are 

more concerned about how many people are working on the project and the total cost of the project," Mr. Sims said. 

"Clients want value no matter who is on the job."

While a handful of elite lawyers have successfully staked out the high end -- the deal teams at Wachtell, Lipton, 

Rosen & Katz, for example -- legal experts say that client pressure to control legal spending means most law firms 

must be more flexible on price.

"There will always be some 'bet the company' problem where a client will not quibble about rates," said Mr. Jones of 

Georgetown. "Unfortunately, from the law firms' standpoint, that represents a small percentage of the work."

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End of Document

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