The State of the Law Firm Industry: Lawyer Statistics 2024

If you are an upcoming law firm with aspirations to make it big, you need some deep industry insights.

In this post, we have curated some essential legal industry statistics to aid with just that. It will provide you with deep insights on:

• the kind of space you will be operating in,
• the revenue you can expect,
• the size of your competition,
• and how you can adopt technology and market your firm.

Let’s start by answering some questions about law firms.

Frequently asked questions about lawyers

How big is the legal industry?

The market size of US law firms is about $365 billion. (IBISWorld)

How fast is the legal industry growing?

The US legal industry is expected to grow at a compounded annual growth rate of 3% till 2030. (Grand View Research)

What percent of lawyers become successful?

Law school graduates rate the value of their degrees poorly. Only slightly less than a quarter of those with degrees from law schools strongly agree that their education was worth the cost. Most don’t think it was worth it.

However, it is more difficult to say what percentage will become successful due to the lack of a standardized metric. (Gallup)

Law firm industry overview

To get started initially, let’s look at some general industry stats. This will help you, an aspiring law firm owner, size up the industry and give you a broad perspective.

1. The market size of US law firms is about $365 billion. (IBISWorld)

2. There are approximately 450,000 law firms in the US. (IBISWorld)

3. The US has about 1.3 million lawyers. (American Bar Association)

4. The median annual wage for a lawyer is about $130k, per a 2020 report. (Martindale-Avvo)

5. 19% of lawyers reported that their compensation increased by more than 10% from the previous year, as per a 2020 study. (Martindale-Avvo)

6. Attorneys in small law firms earn more than solo practitioners. (Martindale-Avvo)

7. The average lawyer seems to work 124 hours per month. (Thomson Reuters)

8. Other law firms were the perceived source of competition for 75% of small law firms. (State of US Small Law Firms, American Bar Association, 2021)

9. Family planning/custody seems to be the No.1 reason, stated by 14% of those surveyed, why people needed to consult legal professionals. (Understanding the Legal Consumer, 2021)

10. Pricing and legal fees are considered by 55% of people before contacting legal assistants. (Understanding the Legal Consumer, 2021)

11. For 48% of people, reviews and ratings are significant factors when selecting their legal practitioners. (Understanding the Legal Consumer, 2021)

11. As per labor statistics data from the Bureau of Labor Statistics, the median hourly wage of lawyers is $61.54. (U.S. Bureau of Labor Statistics)

Law firm revenue stats

Having a sense of what exactly you are up against, we can now dive into some data on the kind of revenue law firms can hope to make.

Based on this, you can get a reasonable estimate of the kind of money on the table if you make it big and what small law firms are currently experiencing in terms of revenue.

1. The combined revenue of the top 100 law firms in the US was over $127 billion in the year 2021. (Statista)

2. US’s largest firms collectively grew revenue at an average of 14.8% after the pandemic, pioneered by two titans at the top of the rankings, Kirkland & Ellis and Latham & Watkins. (Law.com)

3. The top 100 law firms in the US boasted a 12.5% growth in revenue per lawyer and a 19.4% spike in profits per equity partner after the pandemic. (Law.com)

4. Post the first quarter of 2021, demand soared positively for more than 70% of law firms. (Thomson Reuters)

5. The law firm in the US with the highest revenue per lawyer of $3.86 million was Wachtell, Lipton, Rosen & Katz. (Statista)

6. 75% of small law firms consider the overall revenue of a firm as one of the primary measures of the success of their law firm. (State of US Small Law Firms, American Bar Association, 2021)

7. Firms with 2-6 lawyers impacted their revenues the worst due to the COVID-19 pandemic. (State of US Small Law Firms, American Bar Association, 2021)

Adoption of technology in the legal industry

The previous section should give you a good sense of law firm revenue in the US market. But how do you go about increasing it?

It is now a known fact in the legal industry that the growth of law firms has a lot to do with adopting technology, mainly web based software solutions. For an upcoming law firm owner like you, it is essential to know the kind of technology you can adopt to make yourself a success.

To help you with just that, let’s look at some potential technology you can adopt and some of the challenges you might face while doing so.

1. 95% of legal professionals agreed in a survey that it was important to implement and use new legal technology in the legal services industry, while 75% of partners proactively indicated the same. (Legatics)

2. When asked about what kinds of legal technology their firms had used, more than 60% indicated they had used technology for legal research. (Legatics)

3. When asked about what held law firms back from legal technology, close to 50% of survey respondents said that it was a constraint of time to learn the technology. (Legatics)

4. These are the top 5 ways the top 200 law firms in the US are using technology to enhance their firm’s ability to capture more clients and work more efficiently. (Baretz+Brunelle)

5. The legal tech market was worth about $12 billion in 2021 and is projected to cross $16 billion by 2027. (Statista)

Law firms budgets and marketing tactics

We have just seen that adopting technology is an excellent way to facilitate growth. The marketing that law firms undertake is also an attempt at the same.

Let’s now look at some of the ways law firms market themselves so that you may understand how you can do the same and generate leads for your firm.

1. 83% of legal firms hire external marketing firms to do their marketing work. (CallRail)

2. 71% of firms say they are “somewhat” to “very” involved in their marketing efforts and strategy. (CallRail)

3. Most legal firms agree that email is the best way to connect with unconverted leads. (CallRail)

4. Legal firms spend 49% of their yearly budget on marketing. (CallRail)

5. The top 200 law firms in the US have an average marketing budget of $2,354,946, based on a 2018 survey. (ALM Intelligence, 2018)

6. 33% of law firms use Facebook daily for marketing, while 16% market themselves on Twitter, per the American Bar Association. (American Bar Association)

7. Networking is the No.1 marketing tactic used by the majority of small law firms, followed by social media advertising. (State of US Small Law Firms, American Bar Association, 2021)

8. Here’s a general breakdown of the law firm marketing budgets across channels:

• Internet marketing channels account for 28% of a law firm’s marketing budget.
• Law firms spend 19% of their marketing expenditure on print and billboard ads.
• TV advertising accounts for 17% of law firms’ marketing budgets.
• 16% of law firms’ marketing budgets go to networking.
• 14% of law firms’ marketing budgets go to podcast/radio commercials and 10% to other initiatives. (CallRail)

Law firm SEO stats

SEO for lawyers is one the most effective channels to generate leads we have found as an experienced attorney SEO agency. Let’s look at a few law firm SEO stats to establish it.

1. In a 2020 research by Brandmuscle, SEO as the most effective channel by 79% of surveyed participants.

2. 85% of potential clients prefer to use Google as a primary source for research when looking for a lawyer, which makes SEO very important. (iLawyer Marketing)

Ruler Analytics 2021 analysis of 100M data points found that:

• Organic search generates 66% of the call conversion in the legal sector,
• Further, it had a conversion rate of over 4% compared with the overall 2.4% rate of all the seven types of channels analyzed.

3. The three-year ROI on SEO is a whopping 526% for the average law firm. (FirstPageSage)

4. An average law firm spends about $150,000 on SEO. (FirstPageSage)

5. On average, it takes 14 months for legal firms to recoup the costs they incur for SEO. (FirstPageSage)

6. A typical law firm sees an average of 21% increase in organic traffic by improving SEO. (FirstPageSage)

Final thoughts

If you are just starting, hopefully, these stats would have helped you get an idea of exactly what you are in for, what you can expect, and how you can grow your law firm.

The legal industry, especially the corporate law and criminal law sector, is projected to grow over the next decade. With these insights and legal trends, combined with your relentless pursuit, we hope you will make it big.