As AI Arrives, Law Firms More Profitable Than Ever – Survey

A new survey by Thomson Reuters shows that far from legal tech and AI having any negative impact, in 2025 most major law firms made more money than ever before, with AmLaw 100 firms seeing ‘profit per lawyer’ rising over 53% since 2019. Meanwhile, tech spending rose by more than 10% compared to 2024 – following a long-term trend of increasing investment, which now includes many legal AI tools.

Demand for hiring lawyers also increased, so did their salaries, bonuses, and so on….It’s basically a boom time for BigLaw. Yes, some firms are doing better than others. If you want to get upset that partner A makes $3m a year and partner B makes $3.1m, then go for it, but overall it’s crazy times for making money as a commercial lawyer.

Aside from generally increasing demand globally – and increasing charge out rates, 2025 was also a great year for deals. As LSEG data separately shows, worldwide M&A was up by 49%, mega deals over $10 billion were up over 100%, and US-related M&A deals were at a 27-year high. And with M&A comes IP work, employment work, property, finance and banking and more……..And that’s just the deal world. There is a lot more as well.

In short, if you were a corporate lawyer in New York today and someone said: ‘It’s the end of lawyers soon because of AI!’ You’d probably assume they were living on another planet.

And of course, how was all this profit made? By producing billable hours from running lots of ‘manual work’ through large teams of junior lawyers, with just enough legal tech to act as a ‘scaffold’ for their labour, but ensuring that there is as little cannibalism of real billable time as possible.

And yet all of this is happening as law firms are using AI more now than ever before….with major firms continually announcing they’ve bought X or Y platform.

Now, no-one wants these firms to make less money, (in fact – why not make even more.. and, if AI is to be taken up at scale it has to make law firms more profitable, not less), but neutral observers might still assume that lots of AI onboarding means less profits….but no.  

To some this may be counter-intuitive, but as far as Artificial Lawyer sees things, what it shows are three main possibilities – which may not necessarily be mutually exclusive:

• Market demand and the billable hour model are doing just fine, in fact doing so well that these two factors swamp any other consideration or input into the system. To a super-busy deal team, snowed under with multi-billion Dollar deals, and where the clients seem impervious to cost considerations, talk of how X or Y software will change their business model seems esoteric at best.
• That even if the law firm press releases about AI are coming thick and fast now, that actual use at scale and workflows integrated with AI at depth across entire firms, which could change things substantively, is just not there yet. Some help with drafting, review and so on, doesn’t move the dial. Until whole workflows are redesigned to run with AI at their core, as the NewMod AI-first firms are doing, then transformative change can’t really happen.
• And, that even when used at scale and in the way noted above it neither should – or can – reduce the success of the firm. AI has got to increase lawyer profits, otherwise why would they use it? Why invest in it? What business on Earth pays for things that make it earn less? Only if under huge duress and there is a risk of losing big parts of their business would a firm look at AI in this negative way. What management teams want is a positive message, a positive reason for doing this.

Of course, there is one other idea – and that this is the ‘Last Days of Rome’ scenario…..

I.e. some types of market make more money than ever before, right up to the point where they don’t…..

But, that could only happen if A) the clients really change and push back hard and there is little evidence they are doing that, and B) there is real competition based on changes to how AI is used, and where firms have to do things that are disruptive in order to stay in business – also, there is no sign of that yet….

But, we shall see. AL takes a long-term view and it will be interesting to see how long the status quo can continue.

In short, congrats to BigLaw – you’re doing brilliantly. AI is inside now, but its impact – which needs to be notably positive and profit-driving – isn’t really that visible yet, even if legal tech spending is increasing.

What do you think?

Report LINK here.