The German Federal Court of Justice recently clarified online platforms' liability for user-generated content, ruling platforms aren't directly liable without knowledge but must act swiftly upon notification, significantly impacting digital service providers across Europe.
Australia’s eSafety Commissioner ordered Telegram to pay AUD 1 million for ignoring transparency obligations. Officials requested details on terrorist and child sexual content steps, but Telegram delayed months, triggering enforcement under the Online Safety Act.
On 28 February 2025, Japan’s Cabinet announced significant plans to introduce a Bill to promote research, development, and practical application of artificial intelligence technologies. The legislation focuses on transparency, protection of rights, and international cooperation.
The 2025 State of the US Legal Market Report examines how law firms are adapting to innovation, rising client demands, and shifting market dynamics, showcasing a year of strong performance and changing business strategies.
The US legal market is evolving with rapid technological advancements and client expectations.
The 2025 Report on the State of the US Legal Market report, jointly produced by the Thomson Reuters Institute and Georgetown Law's Center on Ethics and the Legal Profession reveals how law firms are adapting and thriving amidst change.
This comprehensive review provides insights into the shifting paradigms shaping the US legal industry.
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The debate over whether law is a profession or a business continues, but 2024 saw firms leaning into business-oriented strategies.
With the traditional billable hour model under scrutiny, discussions around alternative pricing methods gained traction. These new approaches prioritise client value over time spent, fostering a more outcome-driven practice.
The year 2024 proved to be an outlier for law firms, showcasing remarkable performances across three primary metrics: demand, billing rates, and expense control. Demand growth surged to an unprecedented 2.6%, a sharp contrast to the historical average of just 0.1% per year since 2007.
This growth was broad-based, encompassing both transactional and counter-cyclical practice areas, and marked a return to positive territory for practices like corporate, real estate, and tax. Litigation also experienced notable demand growth, reinforcing its position as a key driver of lawyer work hours.
Billing rates defied gravity, accelerating by 6.5% despite cooling inflation. This real growth doubled the annual average of the past decade, with minimal client pushback maintaining steady realisation rates. However, concerns linger about how sustainable this trajectory will be if inflation continues to decline.
On the expense side, firms managed to balance growth and cost control, with expense increases levelling at 5%, far above pre-pandemic norms.
Technology investments emerged as a key driver of these costs, highlighting the industry’s focus on innovation and modernisation. Overall, 2024 cemented itself as a year of anomalies, setting new benchmarks and presenting both opportunities and challenges for the legal market.
Despite economic uncertainties, law firms experienced robust financial performance in 2024.
Profits per equity partner and overall profitability surged, driven by strategic adjustments to compensation structures and partnership models.
According to the report, demand for legal services grew by 2.6%, a remarkable feat compared to past trends. Transactional and counter-cyclical practices both saw growth, signalling a diverse and thriving market.
The report states that US firms are increasingly recognising the importance of technology. Investments in knowledge management and generative AI tools have become critical.
While these innovations promise efficiency, they also challenge traditional billing practices.
With over 75% of legal professionals predicting a transformative impact of AI on their work, firms are bracing for a shift in pricing models and service delivery.
The talent landscape is undergoing a transformation. Firms are hiring more experienced lateral professionals and reducing junior associate recruitment.
Multi-tier partnership structures are becoming the norm, allowing firms to balance expertise with financial sustainability.
Generative AI's rise has also influenced hiring practices, as firms prepare for a future shaped by technological integration.
The next major challenge highlighted in the report revolves around the integration of generative AI (GenAI) and its transformative implications for law firms. More than 75% of surveyed legal professionals predict AI will have a high impact on their work, with 43% expecting transformative changes within five years.
This change is expected to disrupt traditional pricing models, especially the billable hour, as clients demand cost adjustments aligned with AI-driven efficiencies.
AI’s ability to streamline tasks could drastically reduce time spent on legal work, challenging the input-based billable hour framework. Firms will need to adopt value-based pricing models that better reflect the actual worth of their services rather than the time invested.
Additionally, as AI reshapes workflows, law firms face the challenge of revising how they evaluate lawyer productivity, moving away from the emphasis on hours billed.
Adapting to this new paradigm requires strategic planning, as firms must not only invest in AI technologies but also address the ethical and practical implications of these tools on client billing and service delivery.
California introduced Bill AB 1018 to regulate automated decision systems impacting employment, education, housing, and healthcare. The Bill mandates performance evaluations, independent audits, and consumer disclosures to ensure accountability and transparent decision-making.
The CFPB seeks to categorise certain data brokers as consumer reporting agencies under Regulation V. Doing so would tighten obligations, require more transparency, and ensure consumers can see, correct, and control their own information.
House Bill H.210, introduced in Vermont, outlines new guidelines for digital platforms handling minors’ data. By mandating default high-privacy settings and transparent practices, legislators aim to reduce risks of emotional harm and excessive data harvesting.
LegalTech vs LawTech: they are often used interchangeably, but they refer to distinct technological developments. While LegalTech improves legal professionals' workflows, LawTech broadens access to legal services, facilitating how legal support is delivered to businesses and individuals.
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