No, it's not just you to notice—billable rates are rising. And it's not just senior partners' rates, but associates too.

In a report by Valeo Partners says that hourly rates at some Big Law firms will approach $3,000 an hour for senior partners, and $1,000 an hour for associates.

"More demand in M&A and transactional practices, as well as law firm mergers and increasing demand to pay top-performing talent, are pushing billing rates higher, some observers say," notes Law.com. The rate increases amount to some 10-13% in the new year, they add, for most of the Am Law 30 firms.

A report earlier this year showed that rates have gone up not just for the top 50 firms, but across the industry and even across positions. "The mean rate for partners saw the most significant increase, growing from $768 in 2022 to $784 in 2023," stated the analysis conducted by ELM Solutions. "Paralegals experienced the second-largest bump, with an average rate of $263 in 2023, up from $252 in 2022."

"There is really no indication that such a cooling is likely in 2024," Thomason Reuters reported earlier this year. "The pace of rate growth might be unsustainable long-term, but clients have agreed to them up to this point, with no real display of meaningful pushback." And the 2025 appears to be no different.

As Law.com explains, a slew of mergers may explain the rate increase, but the cost of talent is a major driver as well. "In order to keep that profit margin you're going to have to have that retention [of talent], and the more people are willing to pay for it, the law firms are going to push for that," Jennifer McIver, director of legal operations/industry insights for ELM Solutions, noted. She added that the trend may break in part on if/when clients begin diverting more work to smaller (re: less expensive firms) and ALSPs like Lawtrades, and if clients begin asking for rate caps.

"If the problem is how quickly lawyers raise their rates—rather than how high they end up—smaller firms with historically lower rate structures will always be in a bind," says Roy Strom, writing for Bloomberg Law. "Because there’s no sign that firms with the highest rates will slow down. [Josh] O’Connor, the fee expert, told me that at the top of the legal industry 'there is no downward pressure on rates.'"

Verdict

The solution to high (and increasing) legal rates is Lawtrades and other ALSPs who can help with a variety of casework. As firm mergers and a shrinking talent pool keep pressure on rates to go up, finding new ways to leverage outside counsel and ALSPs can manage costs for your legal department.

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