New data from Wolters Kluwer’s LegalVIEW Insights report series suggests that early 2024 law firm rates charted a volatile and inconsistent trajectory. The findings depict an industry still grappling with the impact of the strong, consistent rate increases that faced many corporate legal departments in 2023.
“Successfully absorbing the cost of ongoing law firm rate increases remains a challenge for corporate legal departments,” said Jennifer McIver, Director of Legal Operations and Industry Insights at Wolters Kluwer ELM Solutions. “However, we continue to see evidence that early firm engagement, sophisticated RFP processes, and staunch enforcement of billing guidelines can mitigate spend.”
The LegalVIEW Insights series leverages the more than $180 billion in legal invoice data housed in Wolters Kluwer’s LegalVIEW database. Expert analysis reveals the trends shaping legal spend across industries such as finance and securities, insurance, manufacturing, life sciences, and real estate.
Additional insights found in LegalVIEW Insights volume 2024-1 include:
- Data captured through April 2024 suggests a more fragmented landscape for law firm rates. For example, the manufacturing and life sciences industries experienced average rate increases of 9.7% and 9.9% respectively. Meanwhile the financial and insurance sectors saw average rate decreases of 4.9% and 4.6%.
- 2023 boasted an average rate increase of 5.6% and a median 4.0%. The proximity of median to mean suggests that rate increases were a consistent, widespread reality impacting many corporate legal departments rather than driven by a few isolated outliers.
- The only real signs of a 2023 reprieve came from Am Law 151-200 firms, which reported a significant median rate decrease of 8.1%. However, data collected through April 2024 suggests those fortunes may already be reversing with a median rate increase of 10%.
- Upticks in rates between 4 and 10% accounted for 21.6% of all rate increases in 2023, compared to only 18.8% the year prior.
