A new survey from Wells Fargo’s Legal Specialty Group highlights that while U.S. law firms are investing heavily in artificial intelligence (AI), the technology has not yet delivered measurable financial savings. Spending on generative AI and related technologies pushed law firm overhead costs up by 8.6% in the first half of 2025, excluding employment costs. According to Wells Fargo consultant Owen Burman, AI has not advanced to the point of replacing lawyers in significant numbers, leaving firms to carry both traditional staffing costs and the additional expense of new technologies.
Despite these pressures, financial performance remains strong. The survey, covering more than 130 firms, reported that revenues rose 11.3% in the first half of 2025, while profits per equity partner increased 13.7%, driven largely by a 9.2% rise in billing rates. Some top partners are now charging more than $3,000 per hour, with Milbank’s Neal Katyal billing at $3,250/hour.
At the same time, overall expenses grew by 9.5%, reflecting higher salaries, occupancy costs, insurance premiums, and technology investment. Consultants caution that AI may eventually force firms to rethink the billable hour model, but for now, it adds costs without offsetting savings.
Beyond firm economics, the legal talent pipeline is expanding. Law school applications increased 18% year-on-year, and the 2024 graduating class recorded a 93.4% employment rate within 10 months — the highest on record, according to the National Association for Law Placement.