Rate letters for 2027 are arriving, and law firm rate increases are steep again. Here are six moves that give legal teams a clear basis for every decision this cycle, and how Priori Rate Review helps put them into practice across a full panel.
This is the third and final post in a three-part series on what’s driving outside counsel rate increases and how legal teams are getting ahead of them:
- Why Rate Season Feels Out of Control, and How to Fix It
- Five Questions to Ask Before You Accept a Firm’s Rate Increase
- Law Firm Rate Increases in 2027: Six Moves for Legal Teams
If your inbox is filling with rate letters, the trend behind them is familiar. Am Law 100 worked rates grew a record 9.7% through June 2026, the fourth straight year above 7.3% (Thomson Reuters Institute), and Wells Fargo reported double-digit growth in standard rates over the first half of the year (ABA Journal). AI efficiency has yet to reach pricing: Thomson Reuters found AI showing up in firm costs before it shows up in rates.
With demand strong and increases steady, how each legal team responds sets the rates it pays in 2027 and the starting point for 2028. These six moves give every decision a clear basis.
How to navigate 2027 law firm rate increases
1. Run the cycle as one structured event
Collect every proposal in one window and one format, quantify each request, and apply one policy across the panel. Part 1 of this series walks through how to set that up, and it matters more in a year when many firms will ask for more.
In practice: Send every firm the same template and deadline now, even if some letters have already arrived, so the remaining proposals come in on comparable terms.
2. Put every request through the same questions
How does it compare to the rest of the panel? What will it actually cost? Does it fit the policy? Part 2 covers five questions that give each decision a basis the team can explain to finance and the business.
In practice: Before replying to a firm, write a one-line answer to each question for its highest-dollar requests. The questions you can’t answer show where to push.
3. Separate the increase from the mix
Class-year and promotion step-ups are often bundled with base rate increases, and the combined effect is easy to miss. Look at both, along with how the firm staffs the department’s matters, since a held rate can still mean a higher bill.
In practice: Ask each firm to list promotions and class-year step-ups separately from base increases, with the dollar effect of each.
4. Raise AI efficiency directly
With AI investment showing up in firm costs but not yet in pricing, ask which of the department’s matters the firm uses AI on, how it has changed the time the work takes, and how that shows up in the proposal. One industry analysis found that only 29% of firms have adjusted their fees for AI-augmented work (Artificial Lawyer). For predictable work, the answer may point toward alternative fee arrangements.
In practice: Ask, “Which of our matters are you using AI on, and how is that reflected in this proposal?” Keep the firm’s answer on file with its rate request.
5. Use the full range of outcomes
Some increases should be accepted. Others call for phased or delayed increases, caps, freezes on key matters or timekeepers, or volume discounts. For firms with a credible case and performance still to prove, an increase can be tied to agreed measures reviewed at a set checkpoint.
In practice: Tier firms as strategic, core or occasional. Clear within-policy requests from occasional firms quickly, and spend negotiation time on strategic and core firms.
6. Plan beyond 2027
After four years of increases above 7% at the largest firms, compounding matters more than any single year. Settling rate terms at RFP award or in multi-year agreements, and recording the reasoning behind every 2027 decision, gives the 2028 review a stronger starting point.
In practice: When an RFP awards new work this year, include rate terms through 2028 in the award, and file each 2027 decision with a one-line rationale.
Before you approve 2027 rates: a checklist
- Every firm has received the same template and deadline
- Each request shows percent increase, compound growth and dollar impact
- Requests are ranked by financial impact
- Promotions and class-year step-ups are listed separately from base increases
- Each request has been checked against the written policy
- AI efficiency has been raised with firms doing predictable work
- Every decision has an outcome (accept, negotiate or tie to results) and a recorded rationale
How Priori Rate Review helps
Working through these steps for one firm is manageable. Across a full panel, with hundreds or thousands of proposed rates arriving in the same few weeks, it is where even disciplined teams run out of time.
Priori Rate Review is built for the 2027 cycle at that scale. Firms submit proposed rates through a structured request, and every submission lands in one consolidated dataset as responses come in. The platform calculates percent increase, compound growth and financial impact for every rate, applies the thresholds the team sets, and puts each request in context across the panel. When a request falls outside policy, the team can counter individual rates or use AI to generate counterproposals in bulk against a rule it defines, then work the exceptions by hand. Each decision is preserved with the analysis and negotiation behind it.
Rate Review was developed in collaboration with Priori customers and members of Priori’s Client Advisory Board, and it is built on Priori RFP infrastructure.
Learn more about Priori Rate Review →
Planning your approach to 2027 rates? Connect with our team →
