It’s not a very controversial statement to say that Donald Trump’s attacks on law firms were the biggest Big Law story in 2025. But, according to the guests on today’s episode of our podcast, On The Merits, the ramifications of those attacks are still playing out and may spill over into next year and beyond.
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Bloomberg Law editors Chris Opfer and Alessandra Rafferty said the attacks are still affecting the decisions firms make, or don’t make, in hard-to-detect ways—even though the president is no longer actively lobbing punitive executive orders at firms.
The two Big Law editors discuss how this is playing out and also whether—and why—we may see more firms merge in 2026. They also get into how the legal industry will be affected if we see an AI bubble burst.
Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.
This transcript was produced by Bloomberg Law Automation.
Host (David Schultz): Hello, and welcome back once again to On the Merits, the news podcast from Bloomberg Law. I’m your host, David Schultz.
2025 is finally coming to an end, and I think there are a few law firm leaders who are thrilled to put this year behind them. But will 2026 be any better? It will at least be different than this year, right? We’re going to get into that with two folks whose names you might recognize, if not their voices.
Alessandra Rafferty and Chris Opfer are two editors here at Bloomberg Law who lead our business and practice team, and they also happen to have edited almost every episode of this very podcast in 2025. Today, we’ve decided to put them on the mic to talk about where we’ve been and where we’re heading.
Alessandra and Chris, thank you for joining me.
Alessandra Rafferty: Thanks for having us.
Chris Opfer: Thanks, David.
Host: So, Chris, let’s start with you. Putting aside all the conflicts with Donald Trump, which is not easy to do, where would you say we’re at in the legal industry right now? Are we expanding or are we contracting?
Chris Opfer: Well, I think for the firms that we really focus on, which are the largest in the country and across the world, it has wound up being a very good year for most of them, although it didn’t shake out necessarily the way that they had anticipated at the beginning of the year.
And so when Trump got reelected, large law firms and consultants and advisors and the like really thought that was going to be jet fuel for deals work and the lucrative transaction stuff that the biggest law firms handle, and that deals were really going to go through the roof. And we did not see that, certainly not at the beginning of the year with the trade wars and other uncertainty related to Ukraine and Russia and other international issues.
That being said, the deals market has picked up, private equity has picked up, private credit deals continue to be moving forward. And what we’ve seen so far from individual firms and from some of the banks and the like that track the industry is that the richest and largest law firms in the country got richer and larger this year.
Host: But as I mentioned, we have to talk about Trump. Alessandra, I want to turn to you. What was it like just from a personal level being an editor of the desk that covers the legal industry? What was it like going through that? Were there moments when you saw a headline or you heard something from a reporter that made you say, I can’t believe this is happening?
Alessandra Rafferty: I would say sadly, nothing outright shocks me anymore, but it was absolutely probably one of the most exciting times to be covering the legal industry. And in terms of even where it stands now, I think it’s still quite up in the air. I think we still have a lot of questions. I think our readers still have a lot of questions.
Host: Chris, let’s turn to you. Was there a specific moment that stands out either when the executive orders were signed or when the firm struck the deals where you really thought like, I can’t believe what’s going on right now?
Chris Opfer: Honestly, I felt kind of left out. Our colleagues on some of the other news desks were working around the clock all through the weekend, nonstop at the beginning of the year because of the flood of news coming out of the administration. And it was mighty quiet on our front for a while there. And certainly this kind of attack on the industry wasn’t something that any of us had on our bingo cards going into it.
So it felt real certainly when you’ve got the president from the Oval Office signing executive orders and talking about firms by name as being threats to democracy and threats to national security. And so it was one of those things where we knew with our team that we’d be ready. We didn’t know what the news would bring, but we knew with our core group of folks who have been doing this for a long time that we’d be ready to jump on whatever it was. And obviously that’s what we did.
Host: Now one of the questions that we’ve been posing to feels like almost everyone who’s come on the podcast this year is, who did the right thing? Did the firms that settled do the right thing or did the firms that decided to not settle and fight in court, did they make the right call? And the answers that we’ve gotten have mainly been, it depends, it’s too soon to say. Maybe each firm did the right thing for them.
But I’m going to pose this to you as well. I want to see what you think. Alessandra, let’s start with you. Which firms do you think made the right call or can we really not say that?
Alessandra Rafferty: Yeah, I think you can’t really say that because each firm is different. And also, you know, the litigating firms, that story is not over yet. So we have to see where that leads. But I think it’s very hard for us to put ourselves in that position. I mean, I think what it does show us is how much law firms have expanded beyond the traditional concept of a law firm and that how integrated they are in the financial systems and financial relationships and transactional relationships that they have.
So for some of these, you know, I think it’s fair that they saw it as an existential threat. And I think they did what many of us would do in those conditions. But yeah, I think this, again, this story is not over and it’s one we’ll definitely continue to cover closely.
Chris Opfer: Yeah, you have to think about the beyond the nine that settled and the four that are fighting in court. What we’re really interested in sort of tracing over next year and even beyond is the long-term impact of these things. You’ve seen, in addition to those firms, a bunch of firms say, well, we need to be a lot more careful about what cases and clients we take on or do not take on, not only in the pro bono realm, but in all kinds of other realms where they’re, you know, worried about pissing off the president.
And does that continue? What kind of lasting effects does that have? Does that sort of approach continue even into the J.D. Vance administration or whoever it is that comes in in a few years here when Trump is gone?
Alessandra Rafferty: That’s the problem. When you make a deal that is largely behind the scenes, we don’t really have much accountability or transparency around these deals. So the administration could be availing themselves of the deal that they made for free legal services. We just, we don’t know. We get glimpses. We get looks in. So it’s, I wouldn’t quite call it dormant.
Host: What do you think about that, Chris?
Chris Opfer: I certainly think that there are, you know, firms that are like those who made deals that would make deals if put in that position next year, firms that have fought that would, that are like those that fought that will fight next year. And so if you are predisposed to going one way or the other, there’s evidence to back up why that’s the right decision.
For example, if you’re on the deal side firms, like take a look at a firm like Skadden, which got a lot of heat for making the deal, saw a bunch of associates leave, took a black eye just in terms of the public perception. But they were also very much involved in some of the biggest deals with the biggest clients this year. They worked on the Intel deal where the U.S. was taking a stake in Intel. That was a previous client that Skadden had represented Intel before they made a deal with Trump.
But you have to ask yourself, would Intel have turned to Skadden to do this if they hadn’t done a deal with Trump and if they were on his naughty list, so to speak? And that’s the kind of thing that’s really, really difficult to parse out.
Host: Yeah. I mean, speaking of Trump’s naughty list, that’s going to be a big story in 2026 with the Paramount/Warner Brothers/Netflix saga. It seems like, you know, we’ve been doing some reporting about how it seems like a lot of the players in that saga are choosing their firms with an eye on which ones are in Trump’s favor and which ones aren’t, right?
Chris Opfer: You know, it’s hard to tell. Again, it’s sort of like that Skadden example, but it certainly would make sense if you’re the client. You’re a major corporation, huge entertainment industry player. You can sort of have your pick of the litter in terms of what lawyers and firms you bring in to help you do this stuff. So why take the risk, especially if you’re somebody like an Ellison or someone of that ilk who’s already aligned with the Trump administration and has seen that pay off in certain ways? Why wouldn’t you just stick with somebody who’s quote unquote approved by the White House?
Host: All right. So believe it or not, there were actually things that happened in the legal industry that had little or nothing to do with Donald Trump this year. And let’s get into that.
First of all, I want to talk to you about the role of third party investors in law firms. This is something that was sort of very taboo in the legal world and is becoming much less taboo by the day, it seems like. Do you think that this is something where the momentum here is going to keep gathering in 2026? Or do you think that this will sort of hit a wall and will stall next year?
Alessandra Rafferty: Yes. I think you’ll see more incursion of private equity and third party investors, especially in the mass tort firms and the personal injury firms. But I don’t think that it’s going to overwhelm Big Law. If you look to the UK, which has had this in place for over a decade, there has been a lot of investment, but it’s never really gotten into the upper echelon. And I feel like that’s at least at this point, from this vantage point, that’s what it looks like for us going forward.
Host: That’s really interesting. So you think it’ll keep growing, but it won’t ever grow so big that it takes over the whole industry?
Alessandra Rafferty: Well, I think it’s a little early to say that. But I think in terms of the next year, yeah, I think we’ll see continued growth with certain types of firms.
Host: What do you think about that, Chris?
Chris Opfer: Yeah, I agree. I think it’s really, you see the targeting of personal injury firms, mass torts firms and those doing like family law, consumer facing firms. And that’s for a number of different reasons, including that the places where these types of affiliations, deals are allowed to happen in the US, places like Arizona, Utah, Puerto Rico, et cetera, are places that are not necessarily really hotspots for Big Law firms, corporate law firms that are advising the biggest companies in the world.
Host: Let’s get into mergers. We saw a lot of law firm mergers this year. We saw one really big one announced earlier this month with Hogan Lovells acquiring Cadwalader. Chris, why do you think this is happening? Do you think it’ll continue in 2026? And do you think this is a sign that maybe the demand for legal services is getting a little soft?
Chris Opfer: I think the reason it’s happening goes back to the very beginning of this discussion, which is that the largest and richest law firms in the country are getting larger and richer. This stratification that’s been happening in the industry, or Kirklandization as some call it, has been going on for a decade now. And you’re just seeing it play out over time.
And I think if not every single major theme that we report on, 99% of them all come back to this idea of the industry has grown at such a rapid rate, and the top players are just absolutely crushing it, and everyone’s trying to figure out what to do in their wake. And so one option is to scale up quickly by combining. It’s really helpful for firms in the Am Law 50 to 100 who want to get bigger on the buyer side and on the acquiree side. It’s really helpful for firms like Cadwalader that were in a difficult position, having seen folks leading really lucrative practice areas all jump ship.
Host: Do you agree with that, Alessandra, that this is a sort of a long-term trend that’s just going to continue into next year?
Alessandra Rafferty: Yeah, I don’t think it necessarily reflects a softer demand. I think it’s just the demand of the moment. And I think we’re seeing a lot of transatlantic mergers because I think the London firms are realizing, or the London-focused firms are realizing they really need a strong presence in the US, and a little bit vice versa as well.
Chris Opfer: And those will be good to keep an eye on because for the longest time, I think the industry just said, like, these transatlantic deals don’t work. The cultures are different, the pay scales are different, the way that the firms operate are different, and it’s really difficult to meld two firms into one when one’s based in London and the other’s in New York. Now we’ve seen a string of them, and it’ll be interesting to see how they pan out.
Host: All right, wrapping up here, I’m going to end this podcast by asking both of you a very, very unfair question, which is to look into the future. And I want to hear what you guys think will be the biggest story on our beats in 2026.
Chris, let’s start with you. What do you think we’re going to be talking about this time next year?
Chris Opfer: You know, it’s interesting. I think there’s going to be a few more firms, notable names in difficult positions that are going to have to find merger partners. And I think that’s going to be a story throughout the year. Who’s the next Cadwalader? And do they make a move in time to avoid becoming the next Strook, which was the very old, very large New York firm that went out of business a couple of years ago? And that’s going to be really interesting to watch and to see what sort of levers firms in that position try to pull on in addition to mergers. Maybe those are the firms that start looking at private equity investments or other kinds of deals to stay afloat.
Host: That’s really interesting. Alessandra, you get the last word.
Alessandra Rafferty: I think for sure a big story next year, not just in the legal industry, but everywhere is going to be those two little letters that maybe some of us have come to dread. But it’s AI. And, you know, I think we’ll have to see, there may be a fallout from the bubble. They’re the looming bubble of AI and how that affects law firms. And I think there’s also going to be an impact on junior associates in terms of as the general intelligence gets better and better, there will be an impact on the first tier of lawyers in law firms. And I don’t think, you know, it will be interesting to try and report that out because I don’t think that law firms are going to necessarily want to be very transparent about that. But I think that will be a big story.
Host: That would be so interesting because it would be like AI taking lawyers jobs at the same time that law firms are losing business because the AI bubble is bursting.
Alessandra Rafferty: Well, they’ll be. Don’t worry. They will have plenty of work in terms of all the restructurings and new partnerships.
Host: That’s a good point. There’s always work when the economy is bad for the bankruptcy attorneys.
Alessandra Rafferty: Yeah. Lawyers are involved. Whether they’re putting something together or breaking it down.
Host: All right. Well, Alessandra Rafferty and Chris Opfer, thank you guys so much for talking. This was really great.
Chris Opfer: Glad to do it.
Alessandra Rafferty: Thank you.
Host: All right. And that’ll do it for today’s episode of On The Merits. For more updates, visit our website at news.bloomberglaw.com. Once again, that’s news.bloomberglaw.com.
The podcast today was produced by myself, David Schultz. Our editor today was John Martin and our executive producer is Josh Block. Thanks everyone for listening. See you next time.
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