Law firms might have navigated a successful path through 2022 in their approach to worked rate growth, fostering an improvement in revenue outlooks. What may initially have been a strategy to counteract inflation, now appears to be creating a new benchmark for rate growth. These details were recently revealed by the Thompson Reuters Institute in its Law firm rates in 2023 report.
In response to inflation, firms took the opportunity to elevate their rates. However, if the conjecture that law firms were already billing beneath their true value holds any validity, the cessation of inflation may not necessarily halt these increments.
These increases in billing rates are not necessarily linked to inflation alone, as is commonly perceived. There is a possibility that firms, realising their underbilled services, have leverage to continue with these increases, inflation or not.
This information provides valuable insight into future trends for legal professionals, particularly for those practicing in some of the world’s largest corporations and law firms, where billing rates form a significant part of the operational dynamics.
The full details of the report can be found here.