By Manish Sharma, Director of Business Analysis, Product Management, Wolters Kluwer ELM Solutions
The latest LegalVIEW Insights data makes it clear that broad market averages are becoming less useful as a planning tool. While overall legal rates continue to increase, the factors driving those increases are becoming more nuanced and more specific to each legal department's industry, outside counsel portfolio, and mix of legal work.
In conversations with legal operations leaders, I hear a consistent challenge: legal departments are under pressure to control spending while supporting increasingly complex business needs. Understanding where rate pressure is emerging is critical in that context.
The latest analysis of more than $230 billion in legal invoice data reveals several practical insights that deserve particular attention. Here are my top three.
Takeaway #1: Industry disruption is driving legal costs higher
One of the clearest findings in this year's data is the growing connection between business complexity and legal rates. Industries facing significant operational, regulatory, or economic disruption are also experiencing some of the fastest rate growth.
Manufacturing led all industries in 2025 with a 12.2% average rate increase, while consumer services followed closely at 11.5%. What makes the consumer services figure particularly notable is that it follows a 16.1% increase in 2024, resulting in a cumulative increase of roughly 30% over two years. As a result, consumer services now represents the most expensive industry for blended legal rates.
These increases are not occurring in a vacuum. Manufacturing organizations have faced tariff uncertainty, rising import costs, supply chain challenges, and increased regulatory scrutiny. Consumer-facing companies continue to navigate shifting market conditions and evolving compliance requirements. The legal complexity created by these pressures is reflected in legal service costs.
What this means for legal operations teams
The data shows that legal departments should benchmark against organizations facing similar business realities. Legal operations professionals who benchmark solely against broad market trends risk overlooking the specific factors affecting their own legal portfolios.
Takeaway #2: Strategic firm selection remains one of the most effective spend management levers
Law firm economics also have a role to play. While premium firms continue to command premium rates, the price differential between tiers remains substantial and creates meaningful opportunities for legal departments to evaluate work allocation strategies.
The data shows that Am Law 26-50 firms recorded some of the strongest rate growth in 2025. At the same time, partner rates at firms within that tier average $1,258 per hour compared to $859 per hour at Am Law 51-100 firms. That represents a significant cost gap for legal departments managing large volumes of outside counsel work.
For years, legal operations leaders have focused on assigning the right work to the right resource. The latest data reinforces the importance of that approach. High-stakes, specialized matters may warrant premium-rate firms, but routine or lower-risk work may be effectively handled by firms outside the highest-cost tiers.
What this means for legal operations teams
Legal departments should continue to evaluate:
- Whether work is aligned with the appropriate firm tier
- Whether staffing models support both quality and cost objectives
- Whether rate increases are being matched by measurable value creation
As legal service delivery continues to evolve, strategic work allocation remains one of the most effective tools available for controlling costs without sacrificing outcomes.
Takeaway #3: Legal rate growth is becoming more selective
Perhaps the most interesting signal emerging from the data is that not every practice area is experiencing the same pricing trajectory.
Corporate work continues to command premium rates and remains one of the fastest-growing categories in the market. Early 2026 data shows average blended rates for corporate matters at $936 per hour, with third-quartile partner rates reaching $1,469. For legal departments that support significant M&A, corporate governance, or strategic transaction activity, budget pressure remains significant.
At the same time, certain categories of work are seeing even stronger growth. Information technology matters are up 14.5% year over year, while international legal work has increased 12.7%. Given the increasing importance of AI initiatives, technology investments, cross-border transactions, and multinational regulatory requirements, these findings are not surprising.
What this means for legal operations teams
Instead of treating legal spend as a single category, departments should increasingly evaluate costs by matter type and legal service category. Understanding where rates are accelerating and where they are stabilizing creates opportunities for more accurate budgeting, targeted negotiations, and improved resource planning.
Moving beyond averages
As the legal market continues to evolve, the legal departments best positioned to manage spend effectively will be those that combine benchmarking with deeper insight into their industries, firms, matter mix, and business priorities. Download the full report to learn more: LegalVIEW Insights 2026-2.