Top 10 UK law firms hike hourly rates by 40%
updated on 21 October 2024
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The top 10 UK law firms have increased their hourly rates by almost 40% over the past five years, according to a survey by PwC. The average hourly rate charged by the biggest UK-headquartered law firms by revenue in 2024 was £449, compared to £321 in 2019. All UK law firms in the top 100 saw double-digit growth in their average rates.
The increase in hourly rates is attributed to inflation and more billable hours at all levels, from trainees to partners, following a rise in deals and a busy litigation market. This led to leading law firms seeing their UK fee income grow by an average of 11.6% in the most recent financial year.
The pressure to remain competitive with US law firms has led to a sharp rise in salaries at UK-based international law firms, sparking what has been coined as the ‘war for talent’. A positive outcome of the competitive talent market is that UK law firms have managed to increase their rates, as US firms tend to charge higher hourly rates. While rates remain below top-tier US law firms on average, PwC’s global legal and professional services sector leader Mark Anderson warned that sustaining this growth will be challenging for UK law firms as clients may resist further steep rate increases.
The survey also highlighted cyber risks as the top concern for law firms, with 90% of firms expressing concern about this issue. Meanwhile, almost 90% of the top 100 firms have trialled or implemented generative AI tools, according to the survey.
