Legal sector shines in new US jobs report

By David Thomas and Sara Merken

Feb 12 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)

Employment growth in the U.S. legal sector continued to surge in 2026 adding jobs in January for the 18th month straight, according to new preliminary data released by the Department of Labor.

Figures released by the department's Bureau of Labor Statistics on Wednesday showed employment in the legal sector outpaced other professional fields, while revisions to earlier data revealed legal jobs grew faster than previously reported, adding to the bureau's job count for each month last year.

The total number of jobs in the legal sector, including lawyers, paralegals, judges and legal assistants, stood at 1,236,600 in January, an increase of 5,500 jobs from December and up 8.8% compared to five years earlier.

The upward revisions for legal employment contrasted with the broader economy, which added only 181,000 jobs in 2025 instead of the previously estimated 584,000. That is a fraction of the 1.459 million jobs added in 2024, the final full year of former President Joe Biden's term.

The legal sector grew faster than the finance sector – an important source of revenue and profits for law firms. Finance jobs have decreased ever since they hit a sector-high 9.2 million jobs in May, BLS data shows. The overall sector grew by 5% last month compared to five years earlier.

Employment in the broader U.S. professional and business services sector, which includes legal as well as accounting, consulting, and other services, grew by 7% over the past five years. Jobs in computer systems design – a subset of the professional services sector that includes tech jobs like software developers – increased 6.6% in the same five-year period, while the U.S. healthcare and social services sector grew by more than 19%.

Legal work has been "a high-opportunity and high-growth sector" compared with some other parts of the economy, said Kristin Stark, a principal at law firm consultancy Fairfax Associates.

Investors have poured money into lawsuits through the growing litigation funding industry and are increasingly taking stakes directly in law firms in a small number of states such as Arizona that have loosened rules in the United States that historically prohibited non-lawyers from owning law firms or receiving a percentage of their fees.

The largest law firms have been growing revenue and gaining scale through mergers and combinations, Stark said. Fairfax Associates found that law firm merger activity increased by 18% year-over-year in 2025, and 2026 has already kicked off with a string of deals.

Major U.S. law firms saw double-digit gains in revenue and profitability last year, according to survey data released last month by Wells Fargo's Legal Specialty Group. The company surveyed more than 130 law firms, including 70 of the highest-grossing U.S. firms.

Demand is up for attorneys across the U.S. as well as in Europe, the Middle East and Asia, said John Cashman, president of legal recruiting firm and consultancy Major, Lindsey & Africa.

"We are optimistic about the next six months," Cashman said.

STAFF CUTS LOOM AT BAKER MCKENZIE

Artificial intelligence, meanwhile, continues to hang as a big question mark over legal sector employment. Baker McKenzie, one of the world's biggest law firms, cited the impact of AI in a statement confirming it is expecting to trim its business staff.

The international law firm assessed its business staff functions in a review “aimed at rethinking the ways in which we work, including through our use of AI, introducing efficiencies, and investing in those roles that best serve our clients' needs,” a Baker McKenzie spokesperson said in a statement.

“Some roles will likely be phased out, while others will evolve,” the statement said.

A firm spokesperson said it anticipated reductions of less than 10% of its business professionals globally.

Thirty-six percent of large firms expect generative AI to affect their professional staffing models within two years, according to a recent survey by Citigroup and Hildebrandt Consulting. More than two-thirds anticipate an impact over the next decade, which the report said is “most likely the reduction or elimination of junior roles.”

The authors of the report also predicted that AI will speed up a shift in big firms’ traditional pyramid structure for lawyers.

Another international law firm, Clifford Chance, cut 10% of its business services staff – or 50 positions – in London due to greater use of AI as well as reduced demand, the Financial Times reported in November.

Read More:

States square off with opioids whistleblower over payout from $4.7 billion Walgreens settlement

Lawyers leaving US government drive workforce shift

Decades‑long clash leads to $256 million verdict against human rights lawyer