The £1,000-an-hour corporate partner has arrived in the UK, according to research by Legal Week, which finds clients this year facing substantial increases to their legal bills.

More than two-thirds (68%) of respondents to The Verdict, this month's poll of senior in-house lawyers, said rates had increased by between 6% and 10% in the past year, with the majority putting top-end charge-out rates for partners at £500-£700 an hour.

A further 36% had experienced hourly rates of more than £700, including 4% who had encountered rates of more than £1,000. The going hourly rate for a mid-level associate was cited as £300-£400 by a clear majority of clients.

Partners at top 10 City firms refused to comment publicly, but partners conceded privately that partner rates of £700-£800 per hour are now not unusual at magic circle firms.

No firm would admit to charging headline hourly rates as high as £1,000 but partners said that instructions agreed on flat fees can equate to such levels, particularly on premium corporate work.

One City partner at a US firm said: "Transaction size and complexity is increasing and there have been meteoric salary rises for associates, so it is no surprise that rates are up."

Virgin general counsel Josh Bayliss agreed that increasing rates are being driven by a buoyant market: "The best people are in high demand and very sizeable M&A deals continue to be done. If rates that high are being charged there must be an element of premium to reflect market conditions or complexity."

In-house counsel also said they were footing the bill for the current boom in salaries and partner profits, with 55% saying they are picking up the costs to a 'substantial extent' and 18% saying rising costs were being 'entirely' passed on to clients.

Talkback: Is £1,000 an hour a fair rate for the best City lawyers? Click here to have your say.