Lawyers, Guns & Money
Down on my luck?
Warren Zevon gave us the three things a desperate man needs. Turns out they're also a pretty decent map of what AI is doing to the labor market.
Lawyers first. Big Law headcount is basically flat, but the next gen is getting crushed. Big Law has always been a pyramid, lots of junior staffers grinding through documents while the aged guild manages clients and brings in business. AI seems to be hitting the bottom of that pyramid, because now the rainmaker with 20 years of experience uses Harvey to become even more productive.
The AI lawbots like Harvey, Legora and EvenUp have quadrupled since 2022 and, somewhat ironically, have started more aggressively hiring lawyers themselves.
Guns, quietly, yes. We're probably going to build fewer giant, over-budget armaments like tanks and carriers and far more Anduril-shaped thingys. The old primes, Lockheed, RTX, Northrop, General Dynamics, L3Harris, HII and BAE, cut engineering hiring in half between 2022 and 2025. It's up a little this year, maybe because war is in the air.
Next door, the neo-defense crowd is hiring aggressively. These are the venture-born, new-school defense tech companies like Anduril, Shield AI, Saronic, Palantir, Epirus, Hadrian, Castelion, Skydio, Applied Intuition and Chaos. In 2022 they hired 7 engineers for every 100 hired by the primes. Today it's 42. And when engineers do leave a prime, an increasing share are walking into Anduril.
Money, not yet, but just you wait. This is where the data currently tells me I'm wrong. Quant funds are still hiring, and quant researcher and trader hiring is up since 2022 across the big shops as a group. And these are among the most expensive brains employed anywhere! But Ken Griffin, who called AI garbage in January, told a Stanford crowd in May that agents now do in hours or days what his master's-and-PhD people did over weeks or months.
The price of being really smart is falling. When every desk has roughly the same analytical horsepower, the edge a costly quant brings gets harder to monetize, and the scarce stuff shifts toward compute, proprietary data and capital. Said differently, perfect information is coming.
You can already see the mix starting to move. In 2022 the funds hired 3 ML and AI people for every 100 quants. Today it's 18. Quants leaving for the labs went from basically nobody to a steady drip, OpenAI first, Anthropic second. Follow these people and you're definitely following the money.
So, down on my luck? Big Law's young bucks are already feeling it. The primes' engineers are seemingly as shocked by the effectiveness of drones as everyone else. The quants still look fine, but not immune. Their employers are spending a fortune on machines whose explicit purpose is to make very expensive brains more productive. Eventually somebody in finance is going to ask the obvious follow-up question.
Data: workforce.ai panel. Hires per trailing 12 months, lag-adjusted, through September 2026. Big Law is 16 of the largest firms. Legal AI is Harvey, Legora, EvenUp, Eudia, Clio, Ironclad, Hebbia and Spellbook. The primes and neo-defense are the companies named above. The quant funds are Citadel, Citadel Securities, Two Sigma, D. E. Shaw, Renaissance, Jane Street, HRT, Jump, AQR, Point72/Cubist, Optiver, SIG, Tower, Virtu and DRW.