The legal industry is continuing to enjoy a strong run, with 2025 and the first quarter of 2026 proving profitable for firms across the sector.
Several major firms have recently moved to boost associate compensation packages, signalling confidence in the market and a desire to retain top talent.
Milbank announced it will pay its associates anywhere from $235,000 to $455,000, a figure that underscores the premium firms are willing to place on legal expertise right now.
Despite the prosperity, questions remain about how long the good times can last, particularly as artificial intelligence tools become increasingly sophisticated and capable.
Legal has long been known for its reluctance to adopt new technology, and many observers believe the AI revolution that has disrupted other industries has simply not yet arrived in full force in law.
The broader economy appears to be holding up, and that stability has allowed businesses to approve sometimes staggering rate increases without demanding deeper reforms to how legal services are priced.
The billable hour model remains dominant, with many in-house teams and outside firms showing little urgency to move toward alternative fee structures despite long-running conversations about change.
If economic conditions were to deteriorate, however, businesses would likely push far more aggressively for cost-cutting measures, putting pressure on firms to fundamentally rethink their pricing and staffing models.
There is historical precedent for technology failing to shrink a profession as dramatically as predicted, with the arrival of ATMs once thought to signal the end of traditional banking, yet the number of banks and bankers ultimately grew rather than declined.
The legal sector still faces significant untapped demand, with complex matters and new legal challenges emerging daily, suggesting that even if AI reshapes some tasks, human lawyers will retain a meaningful role.
As one analysis of the sector noted, the evidence so far has been that a steady demand and a steady economy are not forcing businesses to make hard choices, allowing law firms to continue operating largely as usual.
Whether AI will eventually catch up with legal work in the way long predicted, or whether lawyers will simply adapt and find new functions as bankers did, remains genuinely difficult to forecast.