Big Law in Flux: Pay Secrecy, Talent Wars, and the Rise of Legal AI
Law firms are increasingly adopting confidential “black-box” compensation systems as competition for top legal talent intensifies and firms seek greater flexibility in rewarding performance. Unlike traditional transparent models, black-box systems keep partner pay private, allowing firms to broaden equity partnerships, offer wider pay ranges, and avoid tensions tied to origination credits and peer comparisons. Firms like Greenberg Traurig, LLP, Ropes & Gray LLP, and Jones Day use versions of the model, which proponents say fosters collaboration, improves retention, and makes lateral hiring easier. However, critics argue the lack of transparency can create distrust and internal politics, meaning the system works best in firms with strong leadership and deeply established cultures of trust.
MARKET MOVEMENTS
Longtime Goodwin securities litigator, Jennifer Burn Luz, joins Paul Hastings
Davis Polk & Wardwell LLP lures antitrust partner, Jessica Delbaum, from A&O Shearman
Eversheds Sutherland tax attorney, John Ormonde, moves to Greenberg Traurig, LLP
Holland & Knight LLP levels up with pair of Nelson Mullins attorneys, Katherine Baker and Joshua Kirshner
FIRM SPOTLIGHT - O’MELVENY & MYERS LLP
Founded in Los Angeles in 1885, O'Melveny & Myers LLP has grown into a global firm with more than 850 attorneys across 17 offices worldwide. Known for its elite litigation and corporate practices, the firm handles high-stakes disputes, sensitive investigations, billion-dollar transactions, and landmark deals across industries including entertainment, AI, healthcare, and sports. O’Melveny is especially recognized for its work with major media and entertainment clients like The Walt Disney Company, Netflix, and NBCUniversal, as well as its strong litigation bench and emerging companies practice. The firm also honors its commitment to diversity and leadership through the William T. Coleman, Jr. Fellowship program.
INDUSTRY INSIGHTS
Median salary increases have stabilized around 3.5% for general counsel and 3.0% for managing/senior counsel, though total compensation remains high. GCs at companies earning $5B+ make a median of $2.5M, with top earners reaching $5.41M. Private company GCs top out at $3.2M, while portfolio-backed company GCs can earn up to $3.39M.
According to Law.com’s latest survey of mental health in the legal industry, the following factors were the most common answers when asked what things beyond the workplace were negatively affecting their mental health: Political polarization (69%), geo-political world stability (68%) and economic uncertainty (63%). Rule of law concerns (41%), child safety, security and health (35%) and gun violence (31%) followed.
In 2025, Wachtell, Lipton, Rosen & Katz ranked No. 1 in average profits per partner in the Am Law 100, at $12.15 million last year, above Kirkland’s $11.12 million.
In 2025, Davis Polk & Wardwell LLP grew its gross revenue by 25.98% to $3.20 billion and its profits per equity partner by 25.64% to $9.8 million.
Elite Law Firms Redefine Talent Hiring, Pressuring Wachtell’s Model
Historically known for retaining partners, Wachtell, Lipton, Rosen & Katz has seen a wave of recent departures as elite firms increasingly recruit for expertise rather than portable business. Firms like Latham & Watkins, Kirkland & Ellis, and Sidley Austin LLP are using their scale and profitability to make long-term investments in high-performing partners, even if clients do not immediately follow. Industry observers say this shift is reshaping the lateral market and putting pressure on traditional lockstep firms like Wachtell, Lipton, Rosen & Katz and Cravath, Swaine & Moore LLP, which are adapting compensation structures and leadership strategies to remain competitive while maintaining their cultures and market dominance.
Anthropic Expands “Claude for Legal” to Broaden Access to Legal AI
Anthropic has launched “Claude for Legal,” a suite of legal-focused AI tools designed to expand access to legal technology for law firms, nonprofits, and individuals, including smaller organizations that may not afford major legal AI platforms. The package includes practice-area plug-ins, integrations with other legal software and Microsoft Word, and is offered at standard subscription pricing, positioning it as a cost-effective alternative for smaller firms. The company says the goal is to “democratize” legal AI by reducing cost barriers and enabling firms to customize tools with their own knowledge and workflows, while also supporting legal aid organizations through discounted programs. Anthropic emphasizes that the tools are meant to enhance, not replace, legal professionals, and encourages ongoing expansion through open-source plug-in development.
