US Legal Sector Leads Nationwide Job Growth as Law Firms Expand Amid Mergers, Litigation Funding, and AI Uncertainty

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

 

Figures published by the department's Bureau of Labor Statistics (BLS) on Wednesday showed employment in the legal sector outpaced other professional fields. Revisions to earlier data revealed that legal jobs grew faster than previously reported, adding to the bureau's monthly job count throughout 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 from December and up 8.8 per cent compared with 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 – 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 outperformed the finance sector, an important source of revenue for law firms. Finance jobs have declined since reaching a peak of 9.2 million in May, according to BLS data, while overall sector employment grew by 5 per cent compared with five years ago.

 

Employment in the wider US professional and business services sector, which includes legal, accounting, consulting, and other services, increased by 7 per cent over the past five years. Jobs in computer systems design – encompassing tech roles such as software developers – rose 6.6 per cent, while the healthcare and social services sector expanded by more than 19 per cent.

 

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

 

Investors are increasingly funding litigation through the growing litigation finance industry and, in some states such as Arizona, are taking direct stakes in law firms following loosening of historical restrictions on non-lawyer ownership.

 

Major law firms have grown revenue and scale through mergers and combinations, Stark added. Fairfax Associates reported that law firm merger activity rose 18 per cent year-on-year in 2025, with 2026 already seeing a string of deals.

 

Survey data released by Wells Fargo's Legal Specialty Group last month found that leading U.S. law firms recorded double-digit gains in revenue and profitability. The survey included over 130 firms, including 70 of the highest-grossing US practices.

 

Demand for attorneys is rising across the US, Europe, the Middle East, and Asia, according to John Cashman, president of legal recruitment consultancy Major, Lindsey & Africa. “We are optimistic about the next six months,” he said.

 

Staff Cuts Loom at Baker McKenzie

 

Artificial intelligence remains a major uncertainty for legal sector employment. Baker McKenzie, one of the world’s largest law firms, has indicated that AI will influence its business staff, confirming plans to reduce headcount.

 

The firm reviewed its business functions “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 spokesperson said. “Some roles will likely be phased out, while others will evolve.”

 

Reductions are expected to amount to less than 10 per cent of business professionals globally.

 

A recent survey by Citigroup and Hildebrandt Consulting found 36 per cent of large firms expect generative AI to impact professional staffing models within two years, while over two-thirds anticipate effects within a decade, primarily through reductions in junior roles. The report also predicts AI will accelerate changes in the traditional pyramid structure of large law firms.

 

Elsewhere, Clifford Chance cut 10 per cent of its business services staff – or 50 positions – in London last year, citing increased AI use and lower demand, the Financial Times reported in November.

 

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