The coming revival of the PeopleLaw sector

Generative AI will inadvertently reduce the legal profession's disproportionate focus on organizational clients — and could end up redirecting lawyers to meet the legal needs of everyday people.

Those of us who analyze the legal sector owe a great debt to Professor William Henderson of the Indiana University Maurer School of Law. Bill Henderson has pioneered the study and application of data to better understand how law firms operate and how legal services are bought and sold. Among many other accomplishments, he identified the bimodal distribution of starting lawyer salaries in the US, an insight that changed American law students’ understanding of their career prospects.

One of Bill’s most important observations was that, over the course of several decades, the US legal profession has gradually drifted away from serving ordinary people and decisively toward serving organizational clients. A compelling illustration can be found in his 2024 Legal Market Landscape Report, prepared for the State Bar of California, that showed the percentage of total legal receipts by client type (organizations vs. individuals) from 1972 to 2017:

• 1972: Organizations 47.8%, Individuals 52.2%

• 1992: Organizations 60.8%, Individuals 39.2%

• 2007: Organizations 70.9%, Individuals 29.1%

• 2017: Organizations 74.6%, Individuals 25.4%

By 2022, about 6 million business clients accounted for $262 billion of legal receipts for US lawyers, while 332 million individuals generated only $93.3 billion (governments and non-profits represented the remaining $11.7 billion). Bill Henderson called this “the decline of the PeopleLaw sector,” and it complements data from the Legal Services Corporation showing that low-income Americans in particular fail to get any or enough legal help for 92% of substantial civil legal problems, with 53% of respondents unsure if they could find or afford a lawyer.

This imbalance between individual and corporate/organizational clients might be unusually high in the US, given how many global companies are headquartered there; but I expect other countries would show a similar breakdown (and they certainly suffer from the same absence of legal help for individuals). It’s hard to resist the conclusion that as the global economy has massively expanded over the last 50 years, the legal profession has “followed the money” to focus on serving business clients at the expense of meeting people’s everyday legal needs.

This is a long-term systemic problem, and it will take a sustained barrage of solutions to correct. But I’m coming to think that artificial intelligence might play an unexpected role in this rebalancing. AI is poised to empower the demand side of the legal market — an empowerment that could mean less need for lawyers by organizational clients, but more need for lawyers by individuals.

There’s no shortage of commentary about Generative AI’s impact on commercial legal services — sometimes it feels like that’s the only part of the market visible to legal AI pundits. Certainly I’ve contributed to that commentary, insofar as I’ve predicted that the infiltration of AI into midsize and large law firms will bring about radical changes in how these firms create and deliver legal services, price their offerings, measure productivity, and hire and train their lawyers (not to mention the essential nature of the firms themselves).

We haven’t paid as much attention to the ways in which organizational clients are using AI. But corporate legal departments are adopting Gen AI faster than law firms. They’re getting more work done, improving their risk management and compliance tracking while building AI governance frameworks. They’re also keeping more work in-house and expecting to pay less for the work they send to outside counsel.

Gen AI in the corporate/organizational legal market, both supply and demand, is swiftly evolving from high-speed first-draft engines into agentic programs with project management capabilities; semi-autonomous legal production systems could be only a few years away. Legal productivity is shifting from lawyer hours into legal systems, and it’s not coming back. This development will displace lawyers from legal task performance and redirect their efforts towards supervising, validating, and communicating to clients the results of AI-driven legal work systems.

But it will take fewer lawyers and fewer hours to supervise and validate AI legal output than it did for lawyers to create such output themselves. Law firms employ non-equity lawyers for only two reasons: to generate leveraged revenue and to serve as future partner candidates. As AI not only takes on a growing share of legal tasks, but also becomes the primary conduit of legal workflow, the first rationale will become far less important: Law firms will be able to maintain or increase their productivity and profitability while reducing their lawyer population.

Many potential scenarios flow from this point, most of which eventually involve fewer human lawyers working for corporations and for the law firms that serve them. My greatest worry about this turn of events, as regular readers will know, is that our haphazard post-licensure system of lawyer development, which relies on law firms to put the finishing touches on new lawyers’ competence, will break down, threatening the entire lawyer formation process. But even if we manage to address that issue, there’s still a real possibility that several cohorts of relatively inexperienced lawyers in law firms will be made redundant by legal workflow systematization.

Where will these lawyers go? One possibility is that they could, with guided assistance, make their way to the long-neglected PeopleLaw sector, which itself should soon be experiencing an AI empowerment boom.

While reams have been written about AI in the commercial legal sector, relatively little research has addressed the potential use of AI by ordinary people for their legal problems. Articles about AI and A2J are likelier to look “through the lawyer lens,” focusing (for example) on how legal aid providers can best use AI — an important topic, but not really a user-centred one.

Too much commentary in the legal-AI industry still treats individuals who need legal help as an object, not as the subject. We’ve all seen articles that reference the so-called “trillion-dollar latent legal market,” a framework ably demolished by analysts like Amanda Brown, Vivek Sankaran, and Prof. Milan Markovic who persuasively argue that without significant structural reforms, AI might actually “entrench and amplify longstanding inequalities in the justice system.”

We need to proceed cautiously and sensibly here. The mere fact that people can ask ChatGPT for legal information and guidance is not, in itself, a panacea for our longstanding civil justice failure. But it is nonetheless, in itself, an absolutely mind-blowing development, one that will permanently change the pathway between ordinary people and their legal rights and remedies.

Thanks to AI, the supply of legal intelligence is exploding. A valuable capability that was once scarce and expensive is well on its way to becoming ubiquitous and affordable. And it’s already starting to move beyond chatbots: Everyone I know who’s used Claude Code or Claude Cowork comes away shaking their heads at the astonishing capacity to access and direct agentic AI. These tools are still in their infancy, but they’re going to grow up in a hurry.

Lawyers used to be the exclusive gatekeepers of legal expertise and the sole dispensers of legal answers and analysis. They aren’t anymore. The legal capability gap between lawyers and laypeople is closing fast, and I don’t think the legal profession has quite grasped the implications of that yet.

Generative AI will help empower ordinary people to better understand their legal problems and to start charting their own course towards legal remedies. It’s worth re-emphasizing that true access to civil justice will require deep systemic reform, not just an ersatz “AI lawyer” on everyone’s smartphone. AI can help people escape the prison of unrealized and unmet legal needs; but it can’t deliver legal solutions on its own, and it can’t provide the kind of personal accompaniment people need to complete such an important journey.

That’s where lawyers come back into the picture. Even as AI is poised to make human lawyers less necessary in the delivery of commercial legal services, I believe it will make human lawyers more necessary in the delivery of personal legal services.

AI will improve people’s legal issue recognition, self-help capacity, and confidence to seek professional help, bringing them to the periphery of the formal legal system. But they will need human guidance to cross that systemic threshold. Specialist human experts possess better contextual judgment, more accountability, and more practical know-how than AI systems do. And they provide human qualities like reassurance, consolation, and empathy more authentically than machines can mimic. Access-to-justice advocates have repeatedly noted that ordinary people seeking legal help want to get it from a person, not from an interface.

The PeopleLaw sector could soon generate significantly more demand for lawyers who can handle advanced and sophisticated needs beyond AI’s capacity. The organizational-law sector could soon shed a whole lot of lawyers with advanced and sophisticated legal skills. I’m not suggesting a straight substitution for, or migration of, BigLaw lawyers for and to the personal legal market. But I do think that, over the course of the coming years, we could see that kind of movement gradually take place. We could see an overdue rebalancing of lawyers’ market focus and a consequent revival of the long-neglected PeopleLaw sector — more lawyers providing this part of the market with more affordable and effective legal services.

AI could create the conditions that make a PeopleLaw revival more feasible than it has been in decades — a demand-side revival (as more people identify legal problems and seek help), followed by an engagement revival (as more people actually act to pursue legal assistance) and finally a provider-side revival (as more lawyers enter the PeopleLaw sector and build viable practices). That would be as close to a win-win outcome as you could ask for.

It would also be a very tall order. Significant mismatches exist between the needs of the PeopleLaw market and the attributes of many corporate-sector lawyers, including their business models and professional identities. Serious profession-wide retraining efforts will be needed, because the skills that lawyers use to serve large organizations could prove less relevant or inadequate when switching to serve individuals. Demand- and engagement-side revival won’t automatically translate into provider-side revival unless we also address how people find lawyers, how lawyers’ work is priced, and how flexible legal regulators are prepared to be.

And if these trends do manifest themselves and we do see a resurgence of lawyers serving the legal needs of individuals, then the legal profession itself will also require root-and-branch restructuring of professional formation, to ensure that “people-facing skills” are part of the minimum competence for lawyer licensure. But we need that to happen anyway; this is just another reason for us to get started.

The shock waves of AI’s impact on the legal sector could radiate outwards in a hundred different directions. This is only one of them. But it’s about as hopeful and positive a direction as I can envision, and I think it’s worth considering — not just as a contingency plan, but maybe as the most promising route towards a much-needed revival of the legal profession itself.