The Emergence of AI Has Increased Law Firms' Profitability
3
minute
03/02/2026
Zoltán Kéri
A recent Thomson Reuters survey indicates that the rise of artificial intelligence has not weakened the legal market – quite the opposite. The profitability of large law firms has reached a historic high. For firms listed in the AmLaw 100, profit per lawyer has increased by more than 53% since 2019, while technology expenditures have risen by more than 10% compared to 2024. This amount explicitly includes the introduction of AI solutions for legal purposes.
The demand for lawyers has also increased, as have salaries and bonuses. Looking at the international legal market as a whole, it can be said that it is experiencing an exceptionally strong period. Although the performance of individual firms varies, the overall picture is clearly positive, particularly in the field of business law.
Main Trends of 2025
The year 2025 was characterized by increasing legal demand and rising hourly rates worldwide. Global M&A activity expanded by nearly 49%, while the number of transactions exceeding $10 billion more than doubled. In the United States, the M&A market reached its highest level in 27 years.
This transactional boom had a ripple effect on other areas of law, such as intellectual property, employment law, real estate law, and banking and financial law. In this environment, the assumption that artificial intelligence would displace lawyers in the short term seems less realistic for those working in corporate legal practice.
What Explains the High Profitability?
The operational model of large law firms continues to primarily focus on maximizing billable hours. They work with a significant number of junior lawyers and typically apply technological tools – including AI solutions – in a way that does not significantly reduce the amount of billable time.
This occurs despite the fact that firms now use more artificial intelligence than ever before and are continuously announcing new technological investments and platform integrations.
Conclusions
Several conclusions can be drawn from the survey:
- The introduction of AI has so far not reduced law firms' profits; in fact, it coincides with their growth under current operational models.
- Although external observers might assume that automation would curb profits, the numbers do not currently support this.
- This is partly because the model based on billable hours is extremely strong, and partly because AI usage is currently more complementary than fundamentally transformative.
- It can also be concluded that law firms would not invest significant resources in technologies that would materially impair their business performance.
While a future shift is theoretically possible – such as client resistance to prices or the emergence of radically more efficient competitors – based on current data, there is no tangible sign of this yet.
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