Legal Tech’s Predictions for the Business of Law in 2025

Law firms are likely to enter 2025 with a sense of optimism—and a fair share of apprehension at potential disruptions on the horizon. With associate salaries—and rates—reaching record levels, many are questioning just how sustainable the current situation is, and whether a fundamental redistribution of corporate legal spend is imminent.  
 
What is clear, however, is that law firms need to adapt to a changing market—and culture—to survive and thrive. Age-old law firm business models and structures are being challenged not only by the far-reaching automation that gen AI brings, but an aggressive job market of professionals who hold different values and expectations from generations past.
 
Many expect law firms to continue to experiment with different business models and partner pay structures in the new year, though it remains to be seen whether more far-flung changes—such as the evolution of legal regulations—will accelerate in 2025, or similar to years past, remain stagnant.

Here’s a look at experts’ predictions for how law firm business models, hiring, pricing and culture may shift in the coming months.

This article is part of a series of 2025 prediction roundups from Legaltech News. All of our prediction roundups can be found here. The quotes below are in alphabetical order by name, and some have been edited for length and clarity.

Anthony V. Lupo, Chairman, ArentFox Schiff: 2025 will bring market segmentation between law firms that know how to leverage AI to enhance the work of lawyers and those who do not grasp the many benefits of the technology. By now it is clear that AI tools streamline routine tasks and allow attorneys to focus on more complex, value-driven work that enhances their client service. The challenge in front of the legal services industry is how to thoughtfully integrate these technologies and ensure they complement the critical thinking, human judgment, and subject matter knowledge that our attorneys bring to the table.

Casey Flaherty, Chief Strategy Officer, LexFusion: The game will grow more fierce. Dollars will continue to flow to the top—with previously unthinkable premier rates paid to premier lawyers at premier firms. Not just between firms but within firms as the equity ranks continue to shrink on a percentage basis and the compensation ratio among equity ranks continues to swell. At the same time, clients, encountering impossible budget math and more fiscal scrutiny than ever, will continue their efforts to insource and become more aggressive on cost control efforts around their core work (rate discipline, budgets, AFAs, moving work).

Chris DeConti, Co-Founder and Head of Strategy, Factor Law: After 20+ years of false starts, 2025 promises to be the year where redistribution of the $500 billion global corporate legal market actually begins. Law firms will continue to collect almost all the economic surplus but cracks will appear as innovators more adept at integrating AI into transactional work take a bigger share. Long desired, but only newly economically viable legal use cases, will proliferate with contract intelligence, risk analysis and obligations management leading the pack. By unlocking new use cases and demand, the power of AI will create new high-end legal jobs at least as quickly as it displaces traditional ones.

Craig Savitzky, Director of Content Creation, Leopard Solutions: The legal job market in 2025 under a second Trump presidency may see transactional and advisory work rise as deregulation accelerates, reducing compliance demands but driving M&A, tax planning, and corporate restructuring. White-collar defense may stabilize as enforcement eases but with continued activity in proactive compliance. Energy and infrastructure sectors could dominate legal hiring, while environmental and labor law demands may contract. Overall, total open jobs should remain steady, peaking in early 2025 as firms adapt to new policies, creating regional surges in Washington, D.C., and industry hotspots tied to policy shifts in energy, healthcare, and technology.

Jack Rives, President, Rocket Legal Professional Services: Legal service delivery is at a pivotal point, with innovative models like Arizona’s Alternative Business Structure (ABS) showcasing how regulatory reforms can improve access to justice. In 2025, the emerging approaches will gain traction, but entrenched regulatory frameworks will temper the pace of change across U.S. jurisdictions. … 2025 will see the rise of strategic adaptations designed to achieve ABS-like outcomes without directly challenging existing rules. Firms will increasingly explore partnerships with technology providers to enhance service delivery, establish consulting branches to expand their expertise and develop innovative service models that push the boundaries of compliance. These hybrid approaches will foster a nuanced ecosystem of practical innovation, enabling firms to meet market demands while respecting regulatory boundaries. The divergence between technical legality and real-world application will deepen, creating complexities that regulators will struggle to address.

Jared Coseglia, Founder & CEO, TRU Staffing Partners: New administration in the U.S. will usher in deregulation, shifting corporate legal spend toward innovation and litigation instead of compliance risk mitigation. Litigation in the private sector will increase meaningfully—particularly in IP, patent & trademark infringement, and antitrust. Corporate legal departments will shop around for outside counsel in 2025 that can balance cost with expertise and innovation, with far less of a concern on brand cache or trusted legacy relationships. Articulating value beyond historical representation will be crucial for outside counsel to maintain and grow their book of business.

Jennifer Contegiacomo, Vice President and Chief of Staff, QuisLex: In 2025, the legal industry will shift from AI experimentation to systematic implementation. While gen AI experimentation reaches the “late majority” among attorneys, practical implementation will enter the “early adopter” phase. This adoption gap will spark a new professional ecosystem: specialists who design firm-specific AI strategies, integrate tools, develop governance frameworks and train late adopters. Law firms will build AI competency centers, while ALSPs and boutique consultancies will expand specialized AI services. The focus will shift from tools to expertise in implementation.

Laura Saklad, Legal Industry VP, Intapp: 2025 will be the year that law firms shift their focus from data consolidation and data hygiene to data analytics and enabling data-driven business decisions. In the last few years, law firms have made concerted efforts to consolidate their data to support tech modernization initiatives. And the need for a “single source of truth” was heightened as generative AI tools offered new ways to access and utilize previously untapped firm intelligence. Firms will be looking to enhance decision making across every aspect of firm operations, from client selection, to lateral recruiting, to matter management, to lawyer satisfaction and retention.

Laurence Winters, Chief Client Officer, SurePoint Technologies: In 2025, law firms will face shifting priorities around sustainability and ESG initiatives. While demand for firms with strong ESG commitments has grown over the past decade, new political and regulatory dynamics may cause some corporations to deprioritize these values. Despite this, forward-thinking firms will continue embedding ESG principles into operations, recognizing their long-term value. Firms that maintain focus on ESG and DEI, aligning leadership with ethical and sustainable practices, will stand out as resilient partners for clients who prioritize these values, even amidst evolving short-term market trends.

Matthew L. Miller, Senior Vice President of Information Governance and Data Privacy, HaystackID: The cost of legal services will evolve in 2025, with law firms increasingly using AI to reduce operating costs and offer more competitive pricing. Attorneys will need to adapt to AI-driven efficiencies and offer subscription-based legal services and flat-fee models as a means to offset these changes. Client expectations may shift in the document review arena as automation will enable much faster turnaround times, causing the traditional billable hour model to become primarily document-based.

Noreen Weiss, Chair-U.S., Managing Partner New York, GunnerCooke LLP: “Lawyers will continue to drift away from the rigid structures of the traditional law firm model, opting for firms that give them more control over their practice including what they charge, where they work, the projects they take on, and how many hours they bill, as well as firms that are designed to allow them to reap more financial benefit from their collections. … Alternative law firm models that offer freedom from the drama of law firm hierarchies and the hammer of billable hour targets and collections targets, will continue to attract more lawyers.”

Robert D. Keeling, Partner, Redgrave LLP: Increasing rates at Big Law firms will put increasing pressure on the traditional model where litigation associates perform QC of contract attorneys. Clients will start to really push back on the value of general litigation associates performing specialized e-discovery work.

Roy Baez, Organizational Development Manager, ProSearch: Half a decade into a hybrid global workforce the wins and benefits are crystal clear. What is not clear, but which we will begin to understand in the upcoming year and beyond, is the long-term effect of hybrid work and, specifically, the consequences and risk of long-term isolation that come with it for some employees. In 2025, organization leaders will discover fresh ways to connect with employees at a deeper level with consistency and intention, leaving no one behind or left out of the joy and rush of personal growth, visibility, and career success.