Lawyers’ Prices Climb — But AI Investments Weigh on Firm Budgets
A new survey from Wells Fargo’s Legal Specialty Group reveals that in H1 2025, U.S. law firms posted robust financial performance, anchored by a 9.2% surge in billing rates, including top partners now charging well over $3,000 per hour. Notably, this boost drove an 11.3% jump in revenue and a 13.7% increase in profits per equity partner across more than 130 firms analyzed.
The Price of AI: Innovation at a Cost
While revenue climbed, so did expenses. Law firms are grappling with a 9.5% rise in total costs, attributable to both higher compensation and an 8.6% increase in non-attorney overhead, driven largely by investments in generative AI technologies. As one Wells Fargo consultant, Owen Burman, puts it: firms are paying for both the human talent and the AI, with no immediate expense savings.
AI’s Long-Term Upside — and Its Impact on Billing
AI could eventually disrupt the traditional billable hour model. Generative tools might make tasks once billed at hourly rates more efficient or point toward project-based pricing. Yet, industry veterans remain cautious, noting that past technological shifts—from e-discovery to online research—haven’t prompted widespread change
Insights
The legal sector is balancing a powerful paradox: growth fueled by premium fees while navigating mounting costs from AI adoption. As firms invest heavily in new technologies, the economic landscape may shift—especially if these tools fundamentally reshape pricing structures or client expectations.
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