Data Shows Legal Service Costs Skyrocketing: Time for Alternative Legal Services

First Reviewed : July 22, 2023
Last Reviewed: July 22, 2023

The 2023 report found that law firm hourly rates increased 4.5% over the past year, the highest year-over-year increase in the 10 years LexisNexis has published the report.


One of the few constants in life is inflation. It’s not surprising that the cost of legal services are becoming more expensive by the day, while legal departments’ budgets are being tightened. A report by LexisNexis CounselLink collates data for around $52 billion worth of legal spending across more than 1.4 million matters. The report offers a deep-dive into the world of legal service costs and provides insights into how legal departments can deal with these costs. 

In the highest increase in over a decade, law firms raised their legal services rates by around 5.5% at the beginning of 2023. Corporate legal departments are currently struggling with tight budgets, are already low on resources, and are overwhelmed by voluminous legal work. The sudden legal service rate hikes aren’t helping legal departments, struggling to find a solution in the face of rising legal service costs. 

Factors Contributing To High Legal Service Rates 

The current economic downturn, rising inflation, and the aftermath of COVID-19’s effect on the legal industry are a few of the factors behind the rate increases for legal services. While legal service rates were steady or low throughout the lockdowns in 2020 and 2021, with work from home mandates, these rates saw a sharp incline when attorneys started returning to offices – full time or part time, and work from anywhere in 2022. 

Big Law’s biggest law firms have for the most part hiked up their rates by around 6%. This rate is followed by mid-size law firms accounting for the majority of the roughly 5% legal service rate increase. Inflation has hit the legal industry hard, causing law firms to adjust their service prices to match. However, tight legal department budgets make it increasingly difficult to adjust to rising costs, while also getting efficient deliveries.  

ALSPs An Affordable And Efficient Solution 

With tight budgets, rising volumes of legal work, and few resources, legal departments are finding an ally in alternative legal service providers (ALSPs). ALSPs provide legal departments with cost-effective legal solutions, without compromising on quality and efficiency. Unlike law firms, ALSPs are solely legal service providers that have teams of attorneys to provide customized legal services for a fraction of the cost, and with speedy outputs. 

LegalEase Solutions is an ALSP, providing legal departments around the world with efficient solutions customized for their unique legal and business requirements. With solutions covering contracting processes to compliance measures and more, LegalEase Solutions’ teams of attorneys offer legal solutions that are affordable, efficient, and fast.

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