Lawyer hourly fees at US firms boom
The hourly fees charged by lawyers in the US have jumped nearly seven per cent in the last year, the fastest rate since the global financial crisis.
According to research by Thomson Reuters, US law firm billing rates in 2024 accelerated at their fastest pace since the global financial crisis, averaging 6.5 per cent (up from six per cent in 2023).
This growth helped drive profit per lawyer at US law firms up 8.3 per cent in the last year (12 months ending in November).
These figures are up from a fall of 0.1 per cent in profits per lawyer in 2023.
“This is somewhat deceptive, however, considering 2022 was an especially poor year. In many ways, firms spent 2023 stanching the bleeding and 2024 has been a slow crawl back to where firms were before the early 2022 crash,” the report noted.
Demand for legal services rose 2.6 per cent in 2024.
“The level of demand growth seen in 2024 is comparable only to the pandemic-era bounce back from historic lows, when law firm demand grew 3.7 per cent on average in 2021.”
The demand did not come from just one practice area but rather from a general swell of demand across both transactional and counter-cyclical practice groups.
Litigation advice was the fastest-growing segment of the market with demand up 3.3 per cent in the last year.
There was also a notable uptick in demand for real estate advice. Demand for real estate advice rise 1.6 per cent in 2024, reversing the decline of 2023 recorded in 2023.
The research stated that fee “rates in excess of $1,000 per hour are no longer uncommon for many partners”.
Across the Atlantic
US law firms are also dominating London’s legal market. The London offices of top US firms are topping the most-paid lawyer tables.
According to Legal Cheek, a legal publication, some equity partners at Kirkland & Ellis have earnings of as much as £6.1m a year, followed by Paul, Weiss at £5.1m.
Even at the junior end, the US firms are flexing the cash in the City. Last year, the newly qualified (NQ) pay war kicked off again after US firm Quinn Emanuel upped its starting salary for London lawyers to £180,000.
The US firms are increasingly investing in the London market.
According to data provided by legal recruiter Edwards Gibson in December, there were 546 partner moves recorded over 2024, up seven per cent on the previous year.
In this report, Edwards Gibson stated, “The reason… is in large part due to the continued huge investment bets by US law firms”.