A newsletter by Reuters and Westlaw

By Caitlin Tremblay

Good morning. Today we have a look at whether law firms are headed for a downturn after a highly profitable 2025. Plus, Nicolás Maduro’s immunity claim will test U.S. power to prosecute foreign leaders; Nick Reiner is due to return to court for arraignment on double-murder charges; and the 9th Circuit appeared skeptical of a bid from social media companies to cut off addiction lawsuits. Could one of Jupiter’s moons support life? (It’s complicated.) We’re rocketing through the week and I’m over the moon it’s already Wednesday.

REUTERS/Toru Hanai

Large and midsized U.S. law firms enjoyed a highly profitable 2025 thanks to soaring client demand and ever-higher billing rates, but a new economic report warns that the good times may not last — especially if increasingly cash-strapped clients balk at further rate hikes.

Firms could be headed into an economic contraction like the ones that followed spending booms before the global financial crisis of 2008 and after the Covid-19 pandemic, according to the Thomson Reuters Institute’s 2026 Report on the State of the U.S. Market, produced with Georgetown Law’s Center on Ethics and the Legal Profession.  

There are already signs that corporate legal departments have become more cost conscious. In the second half of 2025, clients gravitated toward lower-cost midsized firms. Meanwhile, generative AI threatens to trigger greater client scrutiny of legal bills and billing rates as they seek to get more from their spending, according to the report.

The Thomson Reuters Institute and Reuters share the same parent company.

Read more in this week’s Billable Hours. 

Follow up: Yesterday I flagged 9th Circuit arguments in a case alleging that Meta’s social media platforms are designed to be addictive for young users. Here’s how the arguments went.

Court calendars are subject to last-minute docket changes.

REUTERS/Eduardo Munoz

Nicolás Maduro’s first appearance in a U.S. courtroom offered a glimpse of the legal battle ahead over rarely tested questions—chief among them whether he can claim immunity from prosecution. Maduro, who pleaded not guilty to narco-terrorism and cocaine charges, defiantly claimed on Monday that he remained the president of Venezuela -- setting up a showdown over the legal protections customarily given to heads of state. Tom Hals has more legal analysis here.

U.S. District Judge Alvin Hellerstein, the 92-year-old judge overseeing the Maduro case, is known for adopting unconventional methods to achieve outcomes he sees as fair, and in recent years has ruled against President Trump in high-profile matters. Jan Wolfe has more on Hellerstein here.