Key points:
- NLJ 500 firms added 5.5% more attorneys in 2024, the largest jump of the decade, led by gains in non-equity partners and associates.
- Revenue and profit surged, but Q1 2025 showed early signs of slowdown—including a 13‑point drop in demand index and declining lawyer productivity—raising caution.
- Firms are pulling the reins on summer associate classes, investing in AI, trimming countercyclical headcount and targeting quality laterals.
- Mid‑market standouts like Lydecker and Fennemore Craig remain committed to growth amid integrations.
- M&A, tech, healthcare and energy practices may underpin medium-term momentum, even as uncertainties persist.
The NLJ 500 reported a 5.5% increase in total attorneys from 2023 to 2024, pushing average headcount to 396—marking the fastest growth rate in more than a decade. For context, the average annual headcount growth among the 500 largest U.S. law firms hovered between 1% and 3% over much of the 2010s, with a notable decline in 2020 at the onset of the pandemic. The 2024 spike sharply outpaced even the 3.9% rise seen in 2022, underscoring the magnitude of last year's hiring boom.
This expansion accompanied a 13% revenue surge among Am Law 100 firms and nearly 11% for the Second Hundred. Within the ranks, partner numbers rose 4.4%, while associate headcount increased 6%, and non-equity partners jumped nearly 8%—demonstrating growth across all levels.
Profitability also surged: Q4 2024 saw profits increase by 11.5%, driven by elevated demand and billing rates. Yet early 2025 data suggest a pullback. Demand slipped during Q1, a 13-point drop in the Thomson Reuters index, and productivity fell roughly 0.4%. These indicators, combined with rising expenses from bonuses and legal tech investments, are giving firms pause as they reassess 2025 hiring strategies.
President Trump’s tariff policies briefly boosted litigation and transactional workloads in March, but did not sustain the momentum seen in late 2024. And while billing rates rose aggressively—7.3%, the most since 2005—lawyer output failed to keep pace, prompting caution among firm leaders.
These macro shifts are reflected in recruitment metrics. Summer associate class sizes shrank from 14 in 2023 to 12 in 2024. Lateral partner hiring remains active but far more selective, with firms scrutinizing business cases for each addition, particularly from public sector backgrounds. Firms are also cutting support roles to manage costs, as seen in BCLP’s recent layoffs affecting 8% of its U.S. and U.K. non-legal staff.
Nevertheless, not all firms are slowing. Lydecker’s attorney count ballooned 45.5%, Fennemore Craig’s rose over 40%, and Fagen Friedman & Fulfrost added 35 attorneys to reach 121 total. These firms point to long-term geographic and practice-specific strategies that justify sustained growth, especially in litigation and education law.
Many large firms are now placing bets on high-value sectors. Reports point to continued strength in M&A, healthcare, life sciences, energy, and regulatory practices. Firms are also increasing investment in AI and automation, reshaping billing structures and operational workflows for the longer term.
As firms navigate this period, the playbook appears to blend caution with opportunism: measured associate hiring, selective lateral recruitment, and focused tech investment. While the boom of 2024 may be behind, firms are preparing for what comes next by investing in infrastructure and talent where the long-term upside justifies it.
