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Law Firms Outspend Other Professional Service Employers in Offering Similar Healthcare Benefits

Release Date: January 2023
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Please click here to view the 2023 U.S. Law Firm Medical and Pharmacy Benefit Benchmarking Report.

After two years of significant revenue growth, many law firms are evaluating strategies to balance an economic slowdown with an increase in compensation and other expenses.

A new benchmarking report from the Professional Services Practice at Aon finds that on a per capita basis law firms are paying significantly more than other employers in offering their health plans. However, law firm leaders can take prudent steps to limit future increases and improve the health and wellbeing of their populations.

The Professional Services Practice at Aon collaborated with Aon’s Data Forensics and Informatics team to compile data on “Am Law 200”-ranked law firms with an average group size of 968 participants (including equity partners). The firms in the report offered an average of four plan options, demonstrating that providing participants meaningful choice is still expected and valued. 70% of the firms self-insured either all their plans or their “national” plans, while 30% offered only fully insured plans. This report used data for the 2022 plan year and is the third health plan benchmarking report to be released by our practice.

The results, powered by Aon’s Health Value Initiative database, focus on three main characteristics:

  • Plan Design – the average actuarial value for law firm medical plans was 86% (for every $1.00 spent on healthcare, the plan is estimated to pay $0.86), just slightly higher than the professional services average of 85%.

  • Participant Contributions – Non-partner participants (staff, associates, etc.) paid more for their benefits (about 28% of plan cost) than their peers at other professional service firms (about 26% of plan cost). This is especially true for participants who also cover spouses or children as law firms tend to focus on subsidizing single coverage rather than family coverage.

  • Overall Cost – As stated above, law firms are paying higher per capita cost in offering their health pans without significant differentiation in the “richness” of the plans when compared to other professional service firms or general industry employers. The average annual cost of medical coverage (gross cost, on a per employee per year basis) for law firms was 31% higher than the all-employers benchmark and 41% higher than the professional services benchmark.

By leveraging the insights in this report, law firms can measure the economic value of the firm’s benefits spend and position their health and welfare benefits relative to other industry players. Firms must balance their cost management strategies with the need to offer robust and diverse benefits for the evolving needs of their employee population.

To effectively manage their significant healthcare spend, firms need to challenge legacy thinking, exercise vendor due diligence with a focus on quality and effectiveness, adopt new care delivery models in an increasingly virtual environment, and take a data driven approach to key investments.

Aon Resource: Aon | Professional Services - Benefit Assessment Modeler


The Professional Services Practice at Aon values your feedback.

To discuss any of the topics raised in this article, please contact Mark Scarafone or Jake Delman.


Mark Scarafone
Senior Vice President and Health & Benefits Leader
Radnor, PA

Jake Delman

Jake Delman
Senior Consultant
Washington, DC