In response to rising demand in M&A and transactional
practices and fierce competition for top lateral talent,
significant billing rate hikes are expected at the top US law firms
in 2025. According to The American Lawyer, hourly rates for senior
partners at these firms are approaching $3,000, while rates for
associates now exceed $1,000.1 More firms are predicted
to follow this trend, with Am Law 25-30 firms expecting a 10-13%
increase in their rates next year.1
As these costs continue to rise, clients will need to balance
the need for high-quality legal services with the reality of
escalating prices. This will likely lead to an increase in the
demand mobility rate, as clients seek more cost-effective
alternatives, such as smaller and midsize firms offering flexible
billing arrangements like Alternative Fee Arrangements
(AFAs). Smaller firms, in particular,
have positioned themselves as competitive options by providing the
same quality of service at lower prices
