Ed. note: Please welcome Mike McNamara, chief executive officer of Baretz+Brunelle, to the pages of Above the Law. In this new series, he and his colleagues at B+B will share their thoughts on trends they’re seeing across the legal industry.
People ask me daily where the legal profession is heading. That question is more challenging than ever, but I have a begrudging answer: Yankee Stadium.
Tough admission from a Royals fan who grew up hating the Yankees. But out of the corner of my eye while passing a Yankees game on TV in a New York bar, I saw something that would have been unfathomable just two years ago. Right there, behind home plate: an advertisement for a legal tech company. I don’t mention this because the advertiser — Legora, the AI tool with Jude Law as its brand ambassador — is a client. (Full disclosure: it is.) Rather, the placement of this ad in that particular setting crystalizes how dramatically the legal industry has changed in a short time.
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I’m not talking only about the growth of legal tech, although that is part of the story. The appearance of a legal tech product in prime advertising real estate, where you would actually expect placement of a bank, beer, or sports betting ad, tells just how valuable overnight the most powerful legal tech tools have become. The global legal tech market now projects to grow from $39 billion this year to $72 billion in just five years. Investors have noticed. Legal tech funding hit $4.3 billion last year, up 54% from the previous year, with AI-powered tools driving much of the gain.
Other factors as well are making this an under-the-lights, Yankee Stadium moment for the legal asset class — one grabbing attention like never before. As most things do, this comes down in large part to money. Over the past 50 years, legal services have outgrown every other sector of the economy other than healthcare. Even with the emergence of legal tech tools that might intuitively erode billable hours, the top 100 firms recorded record revenue and profits last year. Mid-sized firms and those in the lower half of the Am Law 200 are thriving as well, outpacing the Am Law 100 in demand growth.
The revolutionary technology and historic profit levels now prevailing are two of four factors combining to make the legal sector more dynamic than ever. Consider just a few headlines from the cacophony of legal news in just the last few days: Kirkland invests $500 million in its own AI platform. Gibson Dunn pays $15 million a year for an appellate star. An M&A boutique sells a stake in its back office to private equity.
The last two touch on the additional factors I mentioned. One takes the metaphor of Yankee Stadium from behind home plate ads to the dugout. The savage war for talent across legal is fueling compensation for rainmaking lawyers up and over amounts being paid to some Yankee players. Recruiting for even the most junior talent is reaching new levels of competitiveness and absurdity, with firms signing draft picks summer associates before they even have their first law school grade.
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Very much related to outsized payments to stars and overperformers, law firms are making colder calculations about who can join or stay in their equity tier. Polsinelli reported a 15% decline in its equity partner ranks in 2024, coinciding with a 31% rise in profits per equity partner. Meanwhile, the nonequity partnership tier, once a rarity at white-shoe firms, has suddenly become universal. Cravath created a salaried partner tier in late 2023; holdouts Paul Weiss, WilmerHale, Cleary, Skadden, Debevoise, Arnold & Porter, Sullivan & Cromwell, and Freshfields have all followed since.
For the first time, nonequity partners now outnumber equity partners at major firms. Lockstep compensation, the defining feature of elite firm culture for generations, feels as quaint as a box of Cracker Jack, having been abandoned at firm after firm. Long-held norms suddenly become vulnerable to transformation, as the failure to do so becomes indicia, or precursor, to failure itself — evidenced by a number of storied Wall Street firms recently combining into global firms to avoid fates that befell firms that are now historic footnotes.
Heading back up to our Bronx metaphor, you cannot ignore the owner’s box. When the Royals’ nemesis and Yankee owner George Steinbrenner assembled his big-name rosters, some felt that the capital-rich outsider was sullying a hallowed game. Private equity encountered a similar reaction as it drew closer to a profession long insulated from outside funding. But now, law firms are expressing increasing exploratory if not actually mutual interest — in many cases, to support their quest for the best talent and technology.
The management services organization structure — allowing investors to own a law firm’s operational infrastructure without owning the firm itself — has gone from an obscure workaround to a mainstream conversation overnight as my partner predicted it would. Roughly a dozen MSO deals closed in 2025, and as the recent example noted above suggests, the trend is ongoing. Even among the largest firms, McDermott Will & Schulte confirmed it is exploring the model. Simultaneously, KPMG received a law firm license in Arizona in early 2025, putting the Big Four formally inside the gate.
All of these changes are raising new and fundamental questions for law firm leadership. How should they price services that have been enhanced with the use of technology? How should they train associates when the repetitive work they formerly learned from has been automated? How do they maintain a sense of partnership after they become a collection of business generators operating on diverse economic arrangements (or should they even care about doing so)? And on and on.
The challenge of helping law firms, corporate law departments, legal innovators, and investors in legal answer these newly relevant questions drew me to Baretz+Brunelle two years ago. Over the coming months, my partners will be discussing them in this space, sharing what we’re seeing in the market.
And to anyone who finds themselves understandably uncomfortable with the change being wrought in the profession, I offer this consolation: Baseball is as timeless as the law, and it looks different than it did just a few years ago too. The game invented by Doubleday now has a pitch clock, a ban on the shift, bigger bases, and an umpire who can be overruled by a machine — changes that felt jarring when they arrived. The game is faster now, and attendance is up.
Full confession: I really do not love watching baseball on TV. But maybe I will more, given what the ads reveal.
Mike McNamara is chief executive officer of Baretz+Brunelle, a growth advisory firm to the world’s preeminent businesses in the legal industry. He previously served as CEO of Dentons US.