Flush with record revenues from 2024, top law firms are navigating a volatile economic landscape, seeing both risks and opportunities in the shifting policies of the Trump administration. While interest rate concerns and tariffs create uncertainty, legal industry leaders remain optimistic about a strong demand for services.
“For us, geopolitical changes represent a catalyst,” said Miguel Zaldivar, CEO of Hogan Lovells, which reported a 9% revenue increase to $2.96 billion last year. The firm’s profit per equity partner surged to $3.07 million, and Zaldivar expects deal activity to pick up soon despite lingering economic anxieties.
Wells Fargo’s Legal Specialty Group reported an average 12.5% revenue growth among law firms last year, with profit per partner jumping nearly 17%, fueled by aggressive billing rate increases. “Generally speaking, firms feel like there’s going to be a pretty robust market for legal services this year,” said consultant Les Starck.
However, economic turbulence remains a factor. Federal Reserve officials have signaled concerns over consumer sector stress and inflation risks, while Trump’s rapid policy changes have disrupted the deal market. Paul Weiss Chairman Brad Karp noted, “There’s been a fair bit of dislocation across the marketplace and geopolitically in the first two months of the year,” but he expects deal activity to stabilize as 2025 progresses. His firm saw a massive 31.6% revenue jump, with profits per partner exceeding $7.5 million.
Other firms are capitalizing on the regulatory chaos. Baker Botts, which reported an 11.8% revenue increase to $820.2 million, recently drew record attendance for a regulatory webinar. “Clients place a premium on anticipating changes in the regulatory environment,” said managing partner Danny David.
Beyond revenues, disclosures from lawyers moving into federal government roles are shedding light on another lucrative aspect of legal careers: retirement pay. Christopher Landau, Trump’s nominee for deputy U.S. secretary of state, reported receiving over $31,000 a month in retirement benefits from his former firm, Kirkland & Ellis—more than his current salary. Meanwhile, WilmerHale partner Jeffrey Kessler disclosed a future monthly pension of $2,200, highlighting the varied compensation structures in the legal industry.
Retirement obligations remain a key concern for law firms, influencing lateral hires and, in some cases, firm stability. The collapse of Stroock & Stroock & Lavan in 2023 was partly attributed to its pension liabilities, underscoring the financial balancing act required to sustain long-term profitability.
As law firms ride the wave of policy shifts and market fluctuations, the coming months will test whether their financial momentum can withstand the economic headwinds ahead.
