Legal Spending Trends

“We will be seriously evaluating whether it makes sense to use large, white-shoe law firms, even for sophisticated matters. The value we get back rarely justifies the spend.”

Fortune 500 FinTech

Despite widespread discontent with fee pressures, clients continue to report an ever-increasing need for external legal counsel.

This steady increase in demand is partly fueled by economic uncertainty and regulatory upheaval, but clients are also wary of soaring legal bills.

Data compiled by Wells Fargo’s Legal Specialty Group reported that billing rates grew by 9.2% in the first half of 2025, driven largely by increased overhead costs.

To justify inflation-busting rate increases, clients increasingly demand innovation and add-on services from external counsel. Clients told Chambers they are exploring their options, including for the kind of work that traditionally calls for elite, national firms.

of clients responding to Chambers expect their need for legal counsel to increase in the next year.

55%

A key trend is consistent economic inflation pressures, which put pressure on outside counsel spend. The cost of doing business is going up, so overall expense reduction pressures could impact selection of counsel based upon rates and value-added services from a particular firm.”

Fortune 100 Insurance Company

During the course of Chambers USA research, clients were also asked to rate their firms on overall value on a sliding scale from 1-5.

Although, on average, clients were largely satisfied with the value represented by external counsel, this was not uniform across practice groups.

The top practice groups outperforming this across-the-board score were Public Finance, Political Law, Government Relations, and Insurance teams.

Conversely, clients scored Private Equity, International Arbitration, Patent Litigation, Technology, and Derivatives practice groups comparatively lower on value for money.

Fig 1. Value For Money: Main overperforming and underperforming practice areas

Difference in each practice group’s mean score to the market average

You see more willingness to work on some success-based or capped-and-collared fees. Skin in the game is something I'd like to see from our outside counsel – so they succeed when we do and they share our risk."

Fortune 500 Healthcare Company

Clients also report some conciliatory moves by their external legal advisors, with more movement towards alternative fee arrangements (AFAs) and outcome-based billing among some of the more sophisticated and regular buyers of legal services.

The increasing usage of artificial intelligence (AI) tools, wider legal technology, and the buying power of larger clients will dictate an eventual move towards blended billing rates, especially for more commoditized tasks.

Key Takeaways

Lawyers Will Stay Busy
Clients report that their demand for external legal services will continue to increase year on year, as regulatory and economic pressures lead them to seek expert counsel.

Clients Will Shop Around
Near double-digit rack rate continues to stir some discontent, with clients increasingly stratifying their legal spend and shifting commoditized work from elite firms.

Time vs. Value Billing
The death of the billable hour is some way off yet, but clients report increasing openness to and use of AFAs.

They have to be open to innovative billing models to match the innovation they support in their clients. The billable-hour model is less and less easy to work with for clients when the rate is just divorced from the work they actually do."

Biotech Company