What the 2022 Data Tell Us about Spiraling Law Firm Fees: Four Explicit Findings (Part I of II)


The Point

From the tenth consecutive year of LexisNexis CounselLink® 2023 Trends Report: In-depth Perspective on Rising Outside Counsel Billing Rates:

1. Law firm lawyer and paralegal (“timekeeper”) rates increased in 2022 at the highest levels since CounselLink first produced the Trends Report, in 2013, with the average partner rate increasing 4.5% (relative to 3.4% last year and 3.5% the year before).

2. These record-high average rates of hourly rate increases were higher than in the previous year “in all tiers of law firms and in all practice areas“.

3. Keeping track of the proliferation of lawyers that outside counsel assign to a matter is a big challenge in managing outside counsel — the finding: “High numbers of billers are performing minimal work on matters.”

4. Alternative fee arrangements (AFAs / capped charges with related terms on success fees, etc.), if they were used, would be the chief antidote to the prevailing billable hour: but only an average of 12.4% of matters made use of AFAs last year. No growth from previous years.

This Matters to Your Business

Kristina Satkunas, Director of Analytic Consulting at LexisNexis CounselLink, authored the 2023 Trends Report.

The data set she analyzed to prepare the 2023 Trends Report was massive: based on $52 billion+ in corporate spending on outside counsel, including billings by 420,000 “timekeepers” (lawyers and paralegals billing clients for hours worked), and based on 4 million+ “matters” (major legal assignments) on which the work was performed.

Because …

So much of what’s available on law firm rates, law firm staffing numbers, and the actual extent of alternative fee arrangements is anecdotal.

The 2023 Trends Report is thoroughly empirical and quantitative.


In Part II we look at an anomaly in the law firm data. Somehow, partner rate increases described above are taking place at unprecedented high percentages. But, at the same time, overall bills for matters remain flat, or are increasing at only modest percentages. A disconcerting, direct inference from this data: law firm work is being delegated away from highly experienced lawyers (partners) to more junior ones (associates).  



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