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The Shift: Everything’s Changing All At Once–or Is It? We Recap the Biggest Changes for the Legal Industry in 2024

I’m taking a bit of liberty with our normal Barometer template to look back at a year that has certainly left its mark on the legal industry and world around it. My colleagues spend each edition examining a key shift in the legal industry, what people are saying about it, the significance of the trend and predictions for what’s to come next on the topic. When you look across all of the Barometer briefings from 2024, some key themes emerge, and you can even see how they shift over just 12 months. I’ll explore some of these themes, and offer some thoughts on how things may continue to evolve in 2025.

The Conversation & The Significance

In looking across all of the Barometer briefings of the year, three key themes emerge. 

• Talent: Whether it was law firms trying to stay competitive, legal departments seeking new paths to finding a GC or any organization trying to adjust for modern-day skills, the legal industry had a major focus on talent in 2024.
  • Law Firms, Partners and Compensation: Perhaps the biggest Big Law trend in 2024 was the adjustments firms made to their partnership tiers and the top-end of their compensation systems in order to attract and keep top talent. Firms that never had nonequity tiers created them, firms that paid $10-15M max are now upwards of $20M per highest-paid partner and could near $30M soon. The spread among the highest- and lowest-paid partners is increasing. And at a recent Law.com Pro webinar, recruiters in this space said there is no indication of this bubble bursting anytime soon, with little ceiling visible for top-end partner comp. The Significance: This type of competition changes career trajectories for partners in law firms, increases the payouts competitor firms have to give, changes how firms approach client relationships in an effort to keep work, and impacts the structure of firms’ partner tiers.
  • Legal Department Staffing: An emerging trend in 2024 was the increasing likelihood that corporations would hire a new GC from outside the ranks, rather than promote from within. They are also increasingly looking at leveraging AI (more on that in a trend below) and that requires different skill sets and different work handled internally. The Significance: Looking externally for a new GC is evidence of how the role and skillset have changed, and companies may not have developed that talent internally. It also limits the career progression of existing legal department leadership. On the AI side, in-house teams are either building up technical staff or bringing more work in-house, or perhaps both. That changes the role of the external provider.
  • Age: This is a smaller trend but interesting to note. We looked at how the questions surrounding President Biden’s age and his decision to step down impacted a similar thought process of more senior lawyers in the legal profession. They said they are now giving more thought to when they might retire. The Significance: If this trend were to take hold and grow in any meaningful way, it could help alleviate (or exacerbate) a long-running problem the legal industry has had with succession planning.

• Politics: It’s difficult to avoid this subject in 2024. Geopolitical events around the world, and certainly within the United States, had noticeable impacts on the legal industry, and will continue to do so into 2025.
  • Law Firm Business: Being in limbo awaiting a U.S. presidential election result meant M&A clients were holding off on deals and suppressing some of the work firms were able to get. The floodgates were said to have opened in the days after the election and firms largely expect a strong financial year despite any temporary chilling effect. Globally, firms were retreating from China and growing in places like the Middle East and Europe, given that’s where the financial and human capital are flowing, they said. Firms also said a Trump administration will mean they will get a lot quieter on social issues and will be careful in who they hire out of the Biden administration. The Significance: While business is expected to boom in many areas, even if regulatory work slows a bit, many leaders expressed concerns over rule of law issues and what their talent would think. Not speaking out on social issues—which would go against what talent had largely asked of firms—will be a dramatic departure from how firms spent the last five years, and talent could have something to say about it. But they may be too busy to speak up given all the work firms are expected to see in 2025.
  • The Judiciary: It wasn’t just law firms and legal departments navigating the politicization of, well, just about everything. The judiciary was in the thick of it as all eyes are on any potential political leanings impacting court rulings and judicial vacancies. The Significance: Whether it’s case backlogs because vacancies aren’t being filled, or judicial rulings coming under scrutiny, or overall erosion of trust in the system, the impact of politics on the court system has been palpable.

• Generative AI:  There was no avoiding this as a key theme for 2024. Though perhaps by next year we will be talking more about workflows and innovation in service delivery rather than calling out the specific tool (in this case gen AI) that was used to achieve those efficiencies.
  • Who can benefit from AI?: In the beginning of 2024, we were still writing about organizations not keeping their heads in the sand about gen AI. And we were writing about whether midsize firms could afford the technology. As the year progressed, understanding and adoption grew, as did the sophistication of the use cases for the tech. And many of the tech providers began targeting the midsize firm segment with more affordable tools for them, seeing it as a big growth opportunity. Similarly, we saw a growing number of legal departments get in on the action and look for ways to bring more work in-house with this technology. The Significance: Midsize firms can use this technology to scale and in-house departments can use the tech to take work away from outside providers. If Big Law doesn’t get in on the action in meaningful ways that provide obvious benefits to clients, they could see a deeper competitive threat.
  • Techifying the C-Suite: It’s not to say Big Law isn’t focused on AI. It is. Another trend we saw in this space ties back to talent. A number of firms have added c-suite level roles focused on technology and innovation. The Significance: This shows firms are recognizing the major impact this tool can have on their business structure and operations, and could suggest they are readying for a deeper look into how legal services are bought, sold and delivered.

The Information

Want to know more? Here’s what we’ve discovered in the ALM Global Newsroom:

• The Coming of Trump’s Judicial Picks Spurs Liberals to Press for Biden’s Picks

• Battle for Talent Pushes Big Law Into Uncharted Territory

• Gen AI Is Eliminating Legal Research and Internal Work Product Silos

• Challenges to Regulators Mount as the U.S. Supreme Court Mulls Chevron Deference

• Legal Rushes to Address AI Risk but Some Efforts Come Up Short

• What it Means to be a Law Firm Partner Now

• Everyone Wants a Bite of Apple

• Why Retirement Might Be Increasingly Top of Mind for Attorneys 

• The Growing Tension – And Opportunity – In Big Law Nonequity Tiers

• The Techification of the Law Firm C-Suite

• More Judges Voice Their Concerns as AI Enters Courtrooms

• How Tech is Helping Fuel the Rise of the Midmarket 

• Can Big Law Extract the Maximum Value of AI?

• In Partner Pay, Law Firms Are Under Pressure to Strike the Right Balance

• Legal Forges Ahead With DEI Efforts Despite Backlash 

• Law Firms Are Turning to Online Training Platforms as Apprenticeship Model Falters

• Gen AI Is Reorienting the Legal Tech Industry. Are Legal Professionals Ready?

• Horizon Scanning the Election’s Impact on Antitrust Regulation

• Chief Justice Loses Ability – or Willingness – To Be a Consensus Builder

• Don’t Be an Ostrich: Understand (and Embrace) the Benefits and Risks of AI

• Legal Industry Gears Up as Presidential Election Hangs in the Balance

The Forecast

Oh, what will 2025 bring? What might we recap 12 months from now? There will of course be something that happens that no one saw coming or could have predicted, but that we will have had to react to and be impacted by. It’s the dealing with the unknown where the legal industry thrives, at least as it relates to advising clients through it.

What we can probably be sure of is that the key overarching issue that will consume the legal industry in 2025 is working through the impacts of the administration change and all that will come with it. Whether its the changes at the top of regulatory agencies, new executive orders or whether there will be a uniform approach to how various industries and issues are handled (i.e. tech or antitrust), the legal industry will be at the heart of unraveling, interpreting, renegotiating or reimagining how business gets done. It promises to be a busy, fruitful, complex year. 

Perhaps we will stop focusing on whether to use generative AI in 2025 and instead talk about how we are changing our service delivery models to better handle workloads, with the tool being gen AI. Adoption and point solutions will be the focus. It will be interesting to see whether the plethora of legal work will slow firms’ efforts to adopt AI and adjust business or pricing models because the money is flowing in — a shortsighted and limiting approach, of course, but it could be reality. 

It’s hard to imagine a year where talent won’t be a key theme for the legal industry. Skill sets and roles will continue to evolve around the edges within each segment of the profession. Even the day-to-day practitioner will have to become more tech proficient. Talent’s sway over particularly law firm operations and commentary may wane. 

Whatever the trends may be, we will be covering them in this space as they unfold and discussing them with you and other experts at our events. We look forward to continuing the conversation in 2025!

Gina Passarella is senior vice president of content at ALM. You can email her at [email protected].