Overview of Revenue Trends

In the first quarter of 2025, larger law firms experienced a substantial revenue growth of 11.3% compared to the same quarter in the preceding year, according to a survey conducted by Wells Fargo’s Legal Specialty Group.

This growth was significantly driven by a 9.5% rise in the standard billing rates for attorneys during the same period.

“Buoyed by persistent rate growth, law firms continued to see revenues increase in early 2025,” said Matt Anderson, leading the Wells Fargo’s Legal Specialty Group.

Demand and Billable Hours

Despite the impressive revenue figures, the demand for legal services—measured through billable hours—showed a modest increase of only 1.7% in Q1. This was described by Anderson as demand that “did not quite live up to expectations.”

Nonetheless, early indicators suggest that law firms maintain a cautious optimism for a fruitful year ahead.

Cost Factors and Hiring Trends

Citing a 9.9% rise in overall expenses, the survey revealed that increasing operational costs have begun to impact profitability. This cost surge is likely attributed to a 3.4% increase in the number of lawyers and a 4.3% increase in professional staff.

Les Starck, a senior consultant with Wells Fargo’s Legal Specialty Group, commented on the hiring scenario, stating that attorney recruitment outpaced the demand for services.

Survey Insights

The findings are based on responses from over 100 firms within the nation’s top 200 grossing law firms, which includes 67 of the 100 highest-grossing and 38 firms from the Second Hundred.