Thomson Reuters confirms Law Firms Thrive as Demand and Worked Rates Increase

Law firms continue investing in people and technology, yet uncertainty lies ahead

Thomson Reuters, a global content and technology company, issued a new report today showing a prosperous second quarter for law firms with demand and worked rates up 1.6% and 7.4%, respectively, while productivity slipped 1.3%. According to the Q2 2025 Thomson Reuters Law Firm Financial Index (LFFI), powered by Financial Insights, law firms continue to invest aggressively in talent and technology with direct expenses rising 7.9%; however, even with demand rising, they must be mindful of the potential uncertainty ahead.

The second quarter was a period of stability and growth as more clients sought guidance from their outside law firms amid global instability. Litigation experienced a 2.0% increase, underscoring the critical role of legal services in navigating complex disputes during uncertain times. Tax and labor & employment practices rebounded following a slow start to the year, while M&A retracted after its strong start.

Interestingly, while Am Law 100 firms saw a decline in demand growth, Midsize and Second Hundred law firms accelerated their demand performance, indicating a potential shift in client preferences towards more specialized or cost-effective legal solutions.

“Market-leading law firms are embracing and investing in AI and other emerging technology to improve efficiency and service delivery, while reevaluating their business models to better align with client needs and expectations,” said Steve Assie, general manager, Global Large Law Firms, Thomson Reuters. “Firms that have moved beyond talking about AI and are actively implementing strategic initiatives are setting the pace in today’s changing legal landscape. Their ability to adapt and focus on deep collaboration with their clients will position them for greater success in the years ahead.”

A copy of the Q2 2025 LFFI report can be downloaded here.

The LFFI, produced by the Thomson Reuters Institute, is a composite index of law firm market performance using Financial Insights data drawn from major law firms in the United States and key international markets.

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