Everyone said AI would make law firms more efficient. It is. The question is who's actually benefiting.

Thomson Reuters' latest Australian legal market update shows non-equity partners have logged a third straight productivity decline in the first half of 2025/26. Junior and mid-level associate hours are down too. Meanwhile, senior associates and equity partners are working more.

On the surface, it looks like AI is simply eating junior work.

AI has taken over the research, drafting and document review that used to fill a junior’s day.

But that work hasn't vanished. It’s moved up.

Advisory judgment, client management, strategic calls — everything AI still can't do — is flowing to senior ranks. Someone has to review the output, own the outcome and manage the client. “Senior associates and equity partners are the ones absorbing that work,” Subramaniam says.

So, the traditional pyramid structure isn't collapsing. It's compressing.

86% of large firms plan to grow associate ranks through 2027, but just 35% plan to boost first-year classes. Experienced laterals and seniors are in. Juniors without strong tech backgrounds are out.

Which brings us to the obvious question. If firms are delivering the same work faster and cheaper, where are the savings going?

Not to clients.

A recent Axiom survey of 600+ senior legal leaders globally found just 6% of law firms charge less for AI-assisted work. 58% haven't cut rates at all despite AI assistance. 34% are actively charging more for AI-enhanced services than they did for traditional work.

Clients know what’s possible. Once they see something delivered in hours instead of days, the pressure to reprice will only build.

But for now, the efficiency gains are sitting firmly with law firms.

Source: Law Society of NSW Journal