US law firms achieved double-digit revenue and net income growth over the first six months of the year, according to a Wells Fargo report.
The Wells Fargo Legal Speciality Group’s six-month survey found that average revenue rose 11.3% in the first half of 2025 compared to a year ago, with net income rising 14.5%. The data is based on 67 Am Law 100 and 46 Am Law Second Hundred firms that completed the survey.
Revenue growth was strongest among the largest firms, with Am Law 50 firms seeing revenue rise 11.9% on average. Am Law Second Hundred firms clocked up revenue growth of 8.5%. Net income was fairly similar across the board, up 14.8% for Second Fifty firms and 13.4% for Second Hundred. However, Wells Fargo says it should be noted that percentage increases for net income can be large for interim reporting given seasonality of collections and cash basis reporting.
Growth was primarily driven by higher billing rates, which were up 9.2% following an 8.8% rise during the same period a year ago. In line with revenue growth, higher billing rates were most pronounced among Am Law 50 firms where average standard billing rates were up 10.3%.
Those increases in billing rates helped offset a drop in demand growth (as measured by lawyer logged hours), which slipped to 2.1% – below the 3.2% growth level that firms forecasted for 2025, according to Wells Fargo’s year-end survey published back in January.
Practice areas including litigation, employment, international trade, private credit, privacy, real estate and energy all saw solid demand, while mid-market transactions and regulatory enforcement saw a drop off.
Productivity also dipped (1.3%) due to increased lawyer headcount (up 3.4%), though profit per equity partner increased by 13.7% compared to the same period in 2024.
Meanwhile, inventory – unbilled work in progress – grew 11%, led by the Am Law 50 which experienced a large increase in unbilled time. This is likely down to transactions work that is billed when a deal closes, Wells Fargo said.
Expense growth also accelerated in the first half of the year, increasing by 9.5% compared to 7% a year ago, in line with revenue growth. Lawyer compensation grew by 10.4% overall, while overhead costs rose 8.6%.
Last year, US firms saw revenue rise 12.5% in Wells Fargo’s Legal Specialty Group year-end survey, up from 6% in 2023 and reaching growth rates only surpassed in 2021 (14%).
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