Law firms' average hourly rates shot up 6.5%, the biggest jump since the Great Financial Crisis nearly two decades ago, Thomson Reuters said in its newly released 2025 State of the Legal Market report.

The report characterized the increase as "defying gravity," given that 2024 was the fifth straight year average rates rose more than 3% and that lofty inflation, which firms had been using to justify rate increases in recent years, has subsided. Excluding food and energy, 2004 inflation was 2.3%, down from a recent peak of 7.3% in June 2022. That meant "real rate growth" in 2024 was 4.2%, double the average for the past decade.