It’s a good time to be a lawyer and for law firms if you believe the latest information from the Bureau of Labor Statistics. But you have to wonder what exactly is going on here. All we hear is how legal technology and AI will replace much of the work lawyers do, so jobs and profits should be down.
But, according to an article that appeared in Reuters, the total number of jobs in legal reached over 1.2 million last month. That was an increase of over 1,200 from April’s numbers and, according to the article, is up over 7% in the past five years. Legal jobs include lawyers, paralegals, and legal assistants.
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On top of this, 2025 and the first quarter of 2026 were profitable too, says the article and other reports. Several firms recently boosted associate bonuses and salaries. Milbank announced it will pay its associates anywhere from $235K to $455K and other firms say they will match those salaries, according to reports.
What In The Sam Hill Is Going On?
It really makes you wonder what’s happening. Supposedly, AI and automation were going to replace much of what those in legal do, prompting theories anywhere from the death of the billable hour to the death of lawyers and law firms. In 2023, for example, Goldman Sachs predicted some 44% of legal work could be automated.
Yet the evidence so far is to the contrary. One possibility is what Gina Passarella discussed and what I wrote about recently: lawyers and law firms just aren’t changing how they have always done things very much. And, the theory goes, why should they. Plenty of demand and, as Passarella put it, “why leave any money on the table.” Indeed, AI has increased such things as litigation since the cost of bringing cases is reduced by AI tools, an important fact for those bringing contingency-fee cases.
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Passarella’s hypothesis though is that the clients, under increasing pressures to lower cost, will begin making demands on their outside lawyers to cut costs, making them make better use of AI tools. Which in turn would reduce the need for so many lawyers and perhaps the dependence on the billable hour.
But clearly that hasn’t happened. It’s business as usual and that business is good.
It Hasn’t Happened… Yet
But let’s not get too comfortable. Just because it hasn’t happened doesn’t mean it won’t.
Yes, demand for legal services continues to be high and may even increase as new and different matters crop up. So even with the adoption of technology, AI and automation, the amount of work that needs to be done increases so that practicing law remains a very profitable endeavor. But as the tech and AI tools get better, at some point, they may catch up with the work and do what’s been long predicted, forcing a decline in the need for human lawyers.
It’s also possible that legal, which is known for not being in any hurry to adopt technology, just hasn’t got there. That the AI revolution impacting other industries will eventually hit legal. Add to this an economy which it seems, despite evidence to the contrary, is continuing to purr right along.
That suggests that while cost containment is important to business and clients, it’s not a priority right now. We see this in the willingness to approve sometimes staggering rate increases, for example. We also see it in the unwillingness of many — both in-house and outside firms — to adopt alternative fee structures beyond the billable hour model.
But if the economy tanks, then businesses are going to demand cost cutting much more vigorously and aggressively than they have so far. That could put legal in the crosshairs. Dramatic and rapid change has happened before. Video conferencing was clearly possible pre-COVID, but wasn’t used. But when we had to use it, we embraced it and adapted it pretty quickly.
And we haven’t gone back. The same could happen to legal if we hit a downturn: rapid adoption of AI across the board.
That would mean the legal bubble could burst, leading to layoffs and disruption.
The Bubble Hasn’t Burst — Maybe It Won’t
The evidence so far has been that a steady demand and a steady economy aren’t making businesses make hard choices and cuts, and this has allowed lawyers and law firms to continue as usual. And perhaps that won’t change.
We have seen this gap between predicted doom and reality before. When ATMs came on the scene, most thought it was the end of banking. Instead, there are more banks and bankers than ever, they just perform different functions than handing out paper money.
So the same may happen with law and lawyers. Indeed, there’s still a huge untapped demand for services. More complex matters and legal issues are being created every day. The billable hour still rules the day.
As with so many things with AI, it’s hard to predict where things will end up. But lawyers and law firms shouldn’t just assume that things will keep going just like they are. The boom could go bust, and if it does, those that have prepared will survive.
Those that haven’t? Remember Blockbuster and BlackBerry. You might be next.
Stephen Embry is a lawyer, speaker, blogger, and writer. He publishes TechLaw Crossroads, a blog devoted to the examination of the tension between technology, the law, and the practice of law.