The NSW property legal services market is developing two distinct pricing bands and they would appear to be growing further apart. The top band (occupied by large global and some large national firms) and representing almost a quarter of the market (23%) have begun to feel comfortable setting a rack rate over $700 an hour.
The bottom band again representing a quarter of the market (27%) price themselves under $500 an hour and unexpectedly 15% of the market goes lower still setting a rack rate under $400 an hour! It’s important to note here that our surveys don’t go to smaller suburban firms or sole practitioners and so these numbers are from small to mid-sized commercial and specialist firms. Only WA and NSW have property Partners who are setting a rack rate below $400 an hour and, given the comparatively high costs of operating both of those two cities, questions must be asked about the sustainability of pricing at this level.
When compared to other states:
- NSW has almost twice as many property lawyers setting a rack rate over $600 per hour than states such as Queensland and Victoria;
- Only Western Australia comes close to having a similar percentage of lawyers charging at the a level in excess of $700 (15% of property lawyers in WA do so); and
- The $500-$600 per hour band that is so frequently used in Victoria and Queensland is less so in NSW with only 19% of lawyers setting an hourly rate in the region.
NSW’s property lawyers were less inclined to use alternative pricing than their colleagues in other states with only 83% of respondents noting its use in the past 12 months.
Those who did use it took the usual option of fixed pricing and capped fees most frequently and regularly used a hybrid of an hourly rate with a fee cap. Some 9% of firms used retainers.