Hourly rates charged to clients by US firms are continuing to grow at pace, outstripping hefty pay rises for American lawyers, a new report reveals.

Research by Thomson Reuters shows that associate pay at top-100 US law firms has risen by 5.1% since Q2 last year, while pay for all other lawyers is up 5.5%. But those rises lag a 7.4% increase in the hourly rates that US law firms charge clients (worked rates, based on all US law firms) over the same period. Even with a slight decline (-1.3%) in the number of hours worked by lawyers in the period, law firms were generating an average of 6.3% more in fees per lawyer.

In April another report, from LexisNexis CounselLink, showed average law firm partner rates rose 5.1% in 2024 - the second-highest since CounselLink launched the report in 2013. That was only slightly down on the 5.4% increase recorded in 2023, which indicated ‘a huge spike due to the pandemic’. Billing rates for top-ranking lawyers in high-value practices are ‘exceptionally high’, LexisNexis reported. Some partners charged over $2,300 (£1,811) per hour in 2024, while high-end associates cost nearly $2,000.

Steve Assie, general manager at Global Large Law Firms, Thomson Reuters, commented that leading law firms were ‘embracing and investing in AI’ and other emerging technology to ‘improve efficiency and service delivery’.

He added: ‘Firms that have moved beyond talking about AI and are actively implementing strategic initiatives are setting the pace in today’s changing legal landscape. Their ability to adapt and focus on deep collaboration with their clients will position them for greater success in the years ahead.’