In 2023, law firm billing rates reached new heights, with partner rates rising 5.4%—the highest increase recorded since the first CounselLink® Trends Report in 2013.
LexisNexis® CounselLink®, a leading enterprise legal management solution, unveiled these findings in its latest report, which highlights key legal market trends across firm sizes and practice areas.
The CounselLink data reveals substantial partner hourly rate growth across states and practice areas in 2023. Massachusetts led state-wise growth with an 8.3% increase, followed closely by New York and Hawaii.
This sharp rise in partner rates, up from 4.6% in 2022 and 3.4% in 2021, reflects the broad impact of economic factors such as inflation, supply chain issues, and regional conflicts on the legal services market. Large law firms, with 750 or more attorneys, continue to lead the industry, billing a median partner rate 61% higher than mid-tier firms. This gap—the largest ever recorded in CounselLink history—has widened significantly from 49% in 2022.
“Given today’s economic landscape, the legal services industry is facing unprecedented pressures,” said Pamela Gelfond, Vice President of LexisNexis CounselLink. “Our report offers crucial insights into the evolving dynamics between corporate legal departments and law firms, enabling our clients to make data-driven decisions in a challenging market.”
Drawing on more than $59 billion in legal spend data across 460,000 timekeepers and 1.6 million matters, the CounselLink Trends Report provides an in-depth analysis of seven key metrics, including law firm partner rates by size, practice area, and geography, as well as a snapshot of billing trends across 18 countries.
In terms of practice areas, Mergers & Acquisitions (M&A) experienced the highest rate growth at 8.4%, followed by Corporate at 7.8%, indicating strong market demand in these high-value sectors.
Key findings from the report include:
Large law firms continue to dominate the market in high-billing practice areas such as Mergers & Acquisitions, Finance, Corporate, Commercial Contracts, and Regulatory Compliance, increasing their share of legal spend from 59.0% in 2022 to 60.3% in 2023.
Despite speculation about a shift in client preferences toward mid-sized firms, large firms have maintained and even grown their share of legal billing, accounting for 48.2% of spend in 2023, up from 45.5% in 2021.
Interestingly, while partner rates climbed in 2023, the average rates across most practice areas remained stable, suggesting that corporate legal teams successfully manage their matter mix through alternative fee arrangements and efficient resource allocation.
“Corporate legal departments are under constant pressure to manage outside counsel costs while maintaining quality,” Gelfond added. “The detailed data in the CounselLink report equips organizations with the benchmarks they need to optimize legal spend and performance in this evolving landscape.”
M&A lead practice area growth with an 8.4% increase, followed by Corporate law at 7.8%, indicating that expenses for high-demand legal services will likely keep climbing.
As M&A-related legal fees are expected to continue rising, RedlineDCS offers a solution to manage deal spend more efficiently. By reducing the administrative burden on outside counsel, our platform allows attorneys to concentrate on providing critical legal advice, helping companies optimize their legal budgets during transactions.
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