Law Firms NAICS 541110

Nov 21, 2025 - Law Firms Moving Away From Remote Work

• US law firms are increasingly moving away from remote work policies that became common during the pandemic, according to industry recruiters. The shift highlights the industry’s effort to balance employee satisfaction with maintaining productivity and competitiveness in a tight labor market. More firms are asking lawyers to come into the office three to four days a week, seeing in-person work as key to collaboration, mentoring younger associates, and maintaining a firm culture. While many firm leaders say this approach helps productivity and keeps teams connected, not all lawyers are happy with the change. Some are pushing back or are even considering leaving for firms that still offer more flexibility. Despite this, the overall trend is clear: remote work is fading as the standard practice in the legal industry. A small number of firms continue to use flexibility for recruiting, but for the most part, law firms are emphasizing face-to-face interaction.
• Artificial Intelligence is rapidly transforming the legal sector, according to Thomson Reuters’, The Future of Professionals Report 2025. Legal professionals expect to save nearly 240 hours annually per person (roughly $19,000) through AI-driven efficiencies in research, drafting, document review, and other routine tasks. Currently, about 30% of legal professionals use AI regularly to begin or refine their work, while 46% of law firms have invested in AI-powered tools over the past year, per the report. Firms with formal AI strategies are 3.5 times more likely to see a return on investment and twice as likely to experience revenue growth than firms using ad hoc approaches, highlighting a widening competitive gap. AI adoption is also reshaping staffing models and productivity expectations, allowing lawyers to focus on higher-value advisory work rather than repetitive tasks.

• US law firms are seeing record pricing power, with average work rates up 7.4% so far in 2025, according to Thomson Reuters. Strong demand for legal services; particularly in corporate, litigation, and regulatory work, has allowed firms to raise fees and take advantage of favorable market conditions. But higher rates don’t come automatically from long-standing client relationships; these connections contribute little to setting a firm apart from competitors. Realization rates are fairly similar across firm sizes and practice areas, which suggests that reputation, specialized expertise, and operational efficiency are becoming more critical. At the same time, economic uncertainty is making clients more cost-conscious, prompting them to explore lower-cost providers or alternative fee arrangements. For US law firms, these trends present both a golden opportunity to capitalize on demand and a challenge to maintain pricing power in a shifting market.
• Revenue for the legal services industry grew by 8% in the fourth quarter of 2024, per the US Census Bureau, in an industry that is in high demand due to complicated regulatory requirements and a boom in companies looking for cyber security and data privacy legal services. Other emerging practice areas ripe for growth include healthcare law, intellectual property, and environmental and scientific compliance. Also fueling revenue growth is a 9% jump in billing rates in 2024, per the American Bar Association, with the need for specialized legal expertise in emerging areas driving the cost increases. These issues have all combined into a robust market for legal services, which have pushed the industry to near-record profitability. This does, however, add pressure to law firms in that they will need to almost double profit growth consistently to counter rising operational costs and still meet market demand.