It turns out being a partner in a law firm in 2024 is still a pretty sweet gig — assuming you’re in the right firm, charging the right clients, and actually having some equity to go with that title. Wells Fargo’s Legal Specialty Group just dropped its year-end survey, and the results are in: the legal industry is making money hand over fist.
Again!
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Total revenue shot up 12.5 percent, nearly double more than doubling last year’s 6 percent growth (UPDATE: counting is hard). While the country talked about the price of eggs and embraced the “Is this a pigeon?” meme except for “a recession,” the actual economy continued to thrive and law firms were no exception. The biggest players cashed in the most, with the Am Law 50 growing revenue by 13.9 percent. Meanwhile, the Second Fifty and Second Hundred firms grew 9.6 percent and 9.9 percent, respectively.
How did firms do so well?
Yes, increased billing rates were the not-so-secret driver behind this revenue surge success. Standard rates jumped 9.1 percent, up from 8.3 percent in 2023. The Am Law 1-50, naturally, went even harder, raising rates 10 percent over last year. The Second Fifty and Second Hundred firms still raised their rates, but at a more “reasonable” 7 percent and 6 percent, respectively.
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And while clients will complain about these hikes, the legal industry was already undercharging for the value of its services before the country absorbed a round of inflation. At least they have a better case for upping fees than Netflix.
Billable hours also ticked up, with demand growing 3.5 percent, a huge jump from last year’s measly 0.7 percent. Despite all the new work, lawyer headcount only went up 1.7 percent, meaning firms squeezed out 1.9 percent more productivity per lawyer.
Meanwhile, the hidden law firm fee burglers — collection and lockup — improved. Collection cycles improved by two days in 2024. Firms are finally getting paid faster, thanks to a mix of better electronic billing, tighter payment terms, and a shift towards transactional work (which pays out quicker than drawn-out litigation).
But a good deal of this new revenue got sucked up by total expenses jumping 9 percent because even in Biglaw you’ve got to spend money to make money.
Though partners — again, equity partners — still have reason to smile. Net income jumped 17.2 percent, with profits per equity partner soaring 16.9 percent. Top firms cleaned up, posting 18.9 percent growth in profits per partner, while the smaller firms still did just fine, with growth hovering around 12.3-12.4 percent. Thanks in no small part to ever tightening control over equity partnership ranks (up a mere 0.3 percent), keeping the spoils of war confined to an elite group on the happy side of the velvet rope.
So, what’s next for 2025? Will clients finally push back on the ever-growing hourly rates? Will overworked associates actually see a break? Will partners ever stop making ridiculous amounts of money? Not likely.
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter or Bluesky if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.