Law firm rate increases have been a topic of discussion in the legal industry in the last few years. Our most recent infographic highlights the areas of legal operations that were most affected by rate increases based on our latest report, the LegalVIEW Insights volume 2023-1.
The data that this report is based on reveals that over the last two years, law departments faced a circumstance that was reasonably foreseeable – the demand would spike and trigger large rate increases from firms – but many may not have been prepared to push back on these increases.
This infographic highlights the industries that have been hit the hardest by rate hikes. The consumer services industry experienced the highest increase, with an 8.6% rate mean increase, followed by the financial services and the industrials industries, both having experienced a 5.9% mean increase from mid-2021 to mid-2022.
In terms of the practice areas that have seen the most significant rate increases, the report shows that governmental relations have been hit the hardest, experiencing a 14.9% mean rate of increase, followed by marketing and advertising areas, which suffered a rate increase of 7.0% in the same 2021-2022 term. These were followed by corporate work, which faced a 6.8% mean rate of increase. Insurance defense showed only small rate increases, while more specialized work saw very sharp increases.
However, the data in our report also shows that, despite these widespread increases, about 40% of law firm timekeepers did not raise rates at all over the study period. This is an indication that many corporate legal departments accepted increases that law firms may have been willing to forego if clients had resisted.
This infographic provides valuable insights into the current state of law firm rate increases and how law firms are responding to them. As the legal industry continues to evolve, we will continue to watch how these trends develop and how law firms adapt to the changing landscape.
To learn more, access the Wolters Kluwer ELM Solutions report LegalVIEW Insights volume 2023-1.
