Reed Smith
International law firm advising large corporations, banks, and insurers worldwide.
On the record
Checkpoint: FY2026 financial results release, which will show if profits per partner keep climbing
The call
Reed Smith is posting record profits while using AI to boost lawyer output, even as billable-hour pricing faces slow pressure from automation and Big Four competitors.
Reed Smith is a large law firm that makes money by charging clients hourly fees for lawyers to handle lawsuits, contracts, and other legal work. It is hard to replace because only licensed lawyers can do this work in court, and clients trust established firms, but AI tools are now doing routine tasks like document review and contract drafting much faster and cheaper, which means clients will pay less per hour even as the firm tries to hire more lawyers and open new offices. The real test is whether Reed Smith can keep making more profit per owner-lawyer even as clients demand lower rates, which will become clear when the firm reports 2026 results in early 2027 and when the new offices and recent lawyer departures show whether growth is real or just noise.
Why
01
AI pressure: Harvey, CoCounsel and similar AI legal-drafting tools. AI automates document review and contract drafting, pushing clients toward flat fees instead of billable hours. Could AI do the core job? Unlikely.
02
Bigger players: Big Four firms like Deloitte and PwC expanding AI-powered legal services. Accounting giants use AI to offer cheaper contract and compliance work, aiming at the same corporate clients. Could a giant copy it? Probably.
03
What protects it. Only licensed lawyers can appear in court or carry malpractice liability, so AI tools need a law firm behind them.
What would change this call
Reed Smith's FY2026 PEP figure released around March 2027. Shows whether AI and leverage are still expanding margins or if pricing compression has caught up.
Further lateral defections of full practice groups to rivals like Crowell & Moring or White & Case in 2026-2027. Would indicate specific practice areas losing competitive standing, not firm-wide client loss.
Client adoption rates of alternative fee arrangements versus billable hours reported in Am Law surveys. Shows whether clients are actually shifting spend away from hourly billing at Reed Smith.
Further lateral defections of full practice groups to rivals like Crowell & Moring or White & Case in 2026-2027. Would indicate specific practice areas losing competitive standing, not firm-wide client loss.
Client adoption rates of alternative fee arrangements versus billable hours reported in Am Law surveys. Shows whether clients are actually shifting spend away from hourly billing at Reed Smith.
Key numbers
- FY2025 global revenue reached $1.58 billion, up 5.6%
- Profits per equity partner hit $2.02 million, up 11.3%
- Revenue per lawyer hit a record $1.11 million
Named risks
- AI-driven shift from hourly billing (forecast to fall from 72% to 44% of work in 2-3 years per Deloitte, 2026-07-08).
- Loss of major practice groups or leaders to rivals (healthcare litigation to Crowell & Moring, M&A chair to White & Case).
- Integration and cost risk from rapid multi-office expansion (Atlanta, Denver 2025, Boston 2026).
- Industry-wide AI adoption (74-77%) eroding billable entry-level document review and research work.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Crowell & Moring | losing to | Lost 40+ lawyer healthcare litigation group, 16 partners, August 2025 |
| White & Case | losing to | Global M&A practice chair Jenny Cheng departed there, April 2026 |
| A&O Shearman | gaining on | Reed Smith hired corporate-trust partner trio from them, May 2025 |
| DLA Piper | gaining on | Reed Smith poached laterals for Asia expansion, 2025-2026 |
| Kirkland & Ellis, Skadden | contesting | Larger elite firms compete for same corporate/M&A work without a structural barrier |
Questions people ask
- Is Reed Smith profitable in 2025?
- Yes. Reed Smith reported FY2025 (year ended Dec 2025, results published March 27, 2026) global revenue of $1.58 billion, up 5.6% year over year, with profits per equity partner surging 11.3% to a record $2.02 million.
- Could AI replace lawyers at Reed Smith?
- Unlikely for core advisory work. Licensure and malpractice liability wall off court representation from AI (96% of legal professionals say AI in court is a step too far, per a 2026-07-02 Thomson Reuters survey), though document review and drafting are already 74-77% AI-assisted industry-wide.
- Is Reed Smith losing lawyers to competitors?
- It has seen high-profile departures: a 40+ lawyer healthcare litigation group (16 partners) left for Crowell & Moring in August 2025, and global M&A chair Jenny Cheng departed to White & Case in April 2026, while the firm also poached laterals from A&O Shearman and DLA Piper.
- Who owns Reed Smith?
- Reed Smith LLP is a private partnership owned by its equity partners, not a publicly traded company. Founded in Pittsburgh in 1877, it grew via mergers rather than outside investment, and converted its London office to an Alternative Business Structure, per company materials.
- Who is Reed Smith's biggest competitor?
- Peer set per CB Insights includes DLA Piper, Jones Day, White & Case, K&L Gates, Crowell & Moring, Winston & Strawn and Schulte Roth & Zabel; White & Case and Crowell & Moring notably poached senior Reed Smith talent in 2025-2026.
- How big is Reed Smith by revenue?
- Reed Smith reported global gross revenue of $1.58 billion for FY2025 (published 2026-03-27), up from $1.5 billion in FY2024 (published 2025-03-11), ranking #40 on the 2026 Am Law 100.
Timeline
- 2026-04-09Global M&A practice chair Jenny Cheng departs to White & Case
- 2026-03-27FY2025 results reported: $1.58B revenue, record $2.02M PEP
- 2026-03-17Boston office opened, staffed with laterals from seven Am Law 50 firms
- 2025-08-0640+ lawyer healthcare litigation group (16 partners) departs to Crowell & Moring
- 2025-07-02Casey Ryan elected global managing partner
- 2025-05Corporate-trust partner trio hired from A&O Shearman in Singapore/Hong Kong
- 2025-03-11FY2024 results reported: $1.5B revenue, $1.8M PEP
- 1877Firm founded in Pittsburgh by Philander C. Knox and James H. Reed
Revision history
23 July 2026
First assessed. Hard to displace. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Reed Smith breaks profit records as revenue climbs to $1.58 billion (2026-03-27)
- Reed Smith Reaches Historic $1.5B in Revenues (2025-03-11)
- Two Pittsburgh law firms make the AmLaw 100 (2026-04-23)
- Reed Smith breaks $2 million PPEP threshold (2026-05-12)
- All You Need To Know (2026-07-05)
- Reed Smith (2026-05-24)
- Careers at Reed Smith
- Reed Smith Number of Employees 2026 (2026-06-29)
- Reed Smith, Law Firm Profile
- Top Biglaw Firm Poaches 40+ Lawyers From Competitor (2025-08-06)
- White & Case Recruits 2 M&A Partners (2026-04-09)
- Top Biglaw Firm Goes On Lateral Shopping Spree (2026-03-17)