Law firms serving the largest companies in the United States billed clients 4.2 percent more hours in the first half of 2026 than in the same months of 2025. Bloomberg Law reported the increase on Sept. 3, 2026, citing newly tallied billing data1. Normal growth in demand for a law firm's time runs close to 1.5 percent a year, the same analysis found. Two-thirds of associates at those firms now run AI through every assignment before a partner reads it, and more than half of partners do the same, according to the firms Bloomberg Law surveyed1. Generative AI use climbed to 94 percent of firms this year, up from 80 percent last year, according to ILTA's 2026 Technology Survey of 508 firms, reported by eDiscovery Today on Sept. 14, 20265.
Chart 1
Demand for Big Law's Time Grows Almost Three Times Its Normal Pace in 2026
Growth in billed hours at the largest U.S. firms, percent, normal annual pace against the first half of 2026
The blue dot is the law firm industry's normal annual growth in billed hours, the magenta dot is the growth Bloomberg Law measured in the first half of 2026, and the rod is the gap between them.
Source: Bloomberg Law [1]. Chart by The AILately.com Desk.
The numbers behind this chart
| Item | Normal annual growth | First half of 2026 |
|---|---|---|
| Demand for law firm hours | 1.5% | 4.2% |
The easy read says artificial intelligence lost its fight with the billable hour. Clients were promised a faster associate and a smaller invoice, the trade lawyers call doing more for less. The invoice grew anyway, the rate card held, and law firm management committees from New York to Chicago are calling the whole year a vindication of the hour itself. Pull the 4.2 percent apart, though, and the vindication reads differently.
Aggregate revenue across the hundred largest American firms climbed to $178.95 billion in 2025, a 13 percent jump. Average profit per equity partner rose to $3.59 million, up 14 percent, Am Law 100 figures reported by The National Law Review on May 4, 2026 show4. Kirkland and Ellis crossed $10.556 billion in revenue that year, the first firm ever past that mark. Wachtell, Lipton, Rosen and Katz paid its partners $12.152 million on average, also a record4. Partners captured a bigger share of a bigger total, and clients paid for it one billed hour at a time, the same hour AI was supposed to shrink.
Steven Croley, general counsel at Ford Motor Co., frames the same AI boom as the end of Big Law's structural edge. "Big Law's historical advantages associated with economies of scale and the ability to provide 'one stop' legal services may become somewhat smaller in an AI world," Croley told Bloomberg Law2. His bet rests on competition. Once smaller firms and in-house teams run the same software a giant firm runs, size alone stops buying a client anything extra.
Rachel Proffitt, chief executive of Cooley, reads the same shift and skips naming the date the old model dies. "I don't think the billable hour dies tomorrow, but I do see it losing its central role over time," Proffitt said2. Pricing, she argues, should track value delivered over hours logged.
Gretta Rusanow runs advisory services for law firms inside Citigroup's banking group, and she reads the identical numbers as proof of the opposite claim. "A continued reliance on the billable hour is just dismissive of the high quality of work they produce," Rusanow told Bloomberg Law, defending a firm's right to raise its price when AI improves the result1. "You might have clients who would love the billable hour because they recognize that it takes less time to do the work," she added, naming the exact trade a client stands to lose1.
Ninety-two percent of in-house legal leaders expect or are already negotiating an AI-related rate cut from their outside counsel, Axiom found in a survey of 528 corporate legal departments published July 9, 20263. Few report getting one. Seven percent of those same departments have moved AI past a pilot into daily, measured use, and 83 percent call last year's AI spending an open question3. "Legal AI is no longer a choice for in-house teams; it's become the baseline," said Sara Morgan, Axiom's chief legal AI and talent officer3.
Chart 2
92 Percent of Legal Chiefs Expect an AI Discount, 7 Percent Have Scaled the Software
Share of the 528 in-house legal leaders Axiom surveyed in 2026, by outcome, percent
Each column is a share of the same 528 leaders: how many expect a price cut from outside counsel, how many moved AI past a pilot, and how many still call last year's AI spending unresolved.
Source: Axiom [3]. Chart by The AILately.com Desk.
The numbers behind this chart
| Item | Value |
|---|---|
| Expect a rate cut | 92% |
| Scaled past pilot | 7% |
| ROI still open | 83% |
Who pays for the forty-five minutes AI saves on a single contract review, and who keeps the money a client used to spend on that time? In-house counsel who bought the software own the budget line and the pressure to show a return on it. Partners who own the client relationship keep the rate card unchanged and bank the difference. Associates who once learned the trade by grinding through due diligence lose the training year AI now skips, the same year that used to build the next partner.
Big Law won its fight with the clock, by a wider margin than anyone outside the equity partnership noticed. It billed the difference to the clients who expected the invoice to shrink. Corporate clients can keep waiting on that discount, and junior associates can keep watching their training years fold into a line item marked efficiency.
The AILately.com Desk tracks where that difference lands inside corporate law, one morning at a time, inside The Signal, its daily email. Sign up, and decide for yourself who an AI-era legal invoice actually pays.
Sources
- Roy Strom, "Big Law AI Cost Savings Remain a Mystery as Billable Hours Jump," Bloomberg Law, Sept. 3, 2026, https://news.bloomberglaw.com/business-and-practice/big-law-ai-cost-savings-remain-a-mystery-as-billable-hours-jump
- Roy Strom, "A Big Law CEO and Top GC Agree: AI Is Forcing a New Firm Model," Bloomberg Law, June 25, 2026, https://news.bloomberglaw.com/business-and-practice/a-big-law-ceo-and-top-gc-agree-ai-is-forcing-a-new-firm-model
- Axiom Staff, "Legal AI Is Everywhere, but Only 7% of Legal Teams Have Made It Work," Axiom, July 9, 2026, https://www.axiomlaw.com/resources/press-releases/legal-ai-is-everywhere-but-only-7-of-legal-teams-have-made-it-work
- LawFuel Staff, "2026 Am Law 100: Kirkland Hits $10B, Wachtell Tops $12M Partner Pay," The National Law Review, May 4, 2026, https://natlawreview.com/press-releases/2026-am-law-100-kirkland-hits-10b-wachtell-tops-12m-partner-pay
- Doug Austin, "ILTA 2026 Technology Survey Results Released: Legal Technology Trends," eDiscovery Today, Sept. 14, 2026, https://ediscoverytoday.com/2026/09/14/ilta-2026-technology-survey-results-released-legal-technology-trends/