While scrolling through the HN forum this morning, I came across an article on the homepage titled “60% of Legal Searches Now End Without a Click. Here’s What That Means for Your Firm.” Although it discusses the situation with American search engines, the situation in China is quite similar. Currently, over 60% of online searches related to legal questions no longer result in any webpage clicks. Users complete their information gathering and even decision-making directly on the search results page or within the AI-generated summaries provided by the search engine. The article predicts that by mid-2026, this proportion could rise to 70%–80%.

Exaggerated Search Engine Ad Prices

Articles with such titles are not uncommon on HN. In recent years, topics like the decline of search effectiveness, the collapse of SEO, and content creators being exploited by platforms have been repeatedly discussed. However, as a tech forum primarily for IT professionals, it’s rare to see issues specific to the legal industry. What surprised me even more were the data on search bidding in the legal industry mentioned in the article.

The article notes that although the overall effectiveness of client acquisition in the legal industry has declined, advertising costs have skyrocketed. On Google in 2025, the cost per click for an ad result like “personal injury lawyer” was 568% higher than in 2021. For location-specific search results like “Las Vegas personal injury lawyer,” the cost per click could reach as high as $500, and many legal keyword search clicks have even exceeded $1,000.

Seeing “cost per click $500, $1,000” might still feel abstract. To truly understand the implications, we need to follow the typical conversion path.

In the most common search ad model for the legal industry, moving from clicking an ad to leaving contact information and then actually securing a case involves at least two to three rounds of filtering. Even with optimistic industry estimates, the conversion rate from ad clicks to effective consultations is typically around 5%, often even lower. From effective consultations to actual signed cases, the rate drops further, with 10% considered a decent performance.

In other words, under relatively ideal conditions, it takes about 20 clicks to generate 1 effective consultation, and converting a paying client from these consultations often requires 5 to 10 consultations.

Putting these numbers together, it means that a law firm may need 100–200 ad clicks to acquire one real client.

With click costs already exceeding $500, the implications are clear. Even at just 100 clicks, the pure client acquisition cost per client reaches the $50,000 range. If we use a more conservative estimate of 150–200 clicks, the acquisition cost could even approach $100,000. This doesn’t include lawyers’ time costs, the firm’s fixed expenses, the risk of case failure, or the numerous ineffective consultations that never lead to cases.

With this calculation in mind, it’s clear that this isn’t just a simple decline in traffic but rather the entire client acquisition model being disrupted. The remaining 40% of clicks are not only decreasing but also becoming increasingly expensive—so expensive that only a handful of top-tier firms or those heavily reliant on high-compensation cases can afford to play this game. It’s hard to imagine how long this money-burning game can continue, and it feels more like a “last gasp” of traditional search engines in the wake of AI’s rise.

Short Videos Might Be the Legal Industry’s Only Lifeline

In recent years, Chinese lawyers have been entering the “short video” space on a large scale. Compared to text-based information, short videos may be the only model with a “moat” in the current AI landscape. On one hand, short videos don’t have to worry about being used as “fodder” for AI, turning into cold code in AI databases where only AI can extract and display them, leaving potential clients with little chance to see them. On the other hand, short video platforms often treat video resources as their most valuable assets, making them difficult to share with other AIs. Finally, from a technical standpoint, current AI isn’t yet powerful enough to fully digest video information into its databases; at most, it can only collect partial summaries, descriptions, subtitles, or speech-to-text information from videos.

However, short videos themselves aren’t a more efficient tool but rather the only remaining public communication channel accessible to ordinary law firms as search engines gradually lose effectiveness. When users no longer click on webpages, browse law firm websites, or actively compare options using keywords, the entire logic of information acquisition shifts from “users actively seeking lawyers” to “whether lawyers can be remembered by users when they come across them while scrolling.”

In the search era, users typically had clear needs before seeking solutions. Now, this niche is being taken over by AI, which, in its operational mode, makes it almost impossible to direct traffic to law firms or lawyers.

On short video platforms, users scroll unconsciously during fragmented time. When they come across a lawyer who aligns with their “values,” they might give a like or follow, becoming potential clients. Users willing to watch videos fully, actively follow, or leave comments are already pre-screened, leading to more effective consultations and fewer ineffective ones.

It’s here that the differences between the Chinese and American legal industries become subtle. In the U.S., legal services are highly market-driven, case amounts are substantial, and search ads can still work in a few niches. In China, however, most ordinary legal needs aren’t sufficient to support high search costs, making short videos not just an “option” but the only realistic path forced by circumstances.

Of course, I’m primarily discussing “online client acquisition” here. Traditional offline client acquisition and client maintenance in the legal industry are beyond the scope of this article.

Why the American Legal Industry Hasn’t Been Defeated by AI Yet

While short videos are a lifeline for Chinese lawyers, the overall landscape of the American legal industry seems to be facing more direct challenges. Although search ad acquisition is expensive, high-value cases can still support the costs. However, as AI begins to directly offer services like legal summaries, contract generation, and case analysis, some of the core value traditionally provided by lawyers is being diminished. The competitive advantage that relied on professional knowledge and research capabilities is being rapidly compressed by AI’s ability to process tasks at scale.

In other words, the legal industry’s core “information asymmetry” moat is being eroded by AI. High-end cases may retain a human advantage in the short term, but for ordinary civil or labor disputes, AI’s automated solutions can already cover the vast majority of needs. Under this trend, the pricing structure, client acquisition models, and even industry profit margins of American legal services could be profoundly reshaped.

This morning, China’s National Bureau of Statistics announced that China’s GDP for 2025 reached 140 trillion yuan. Although this is still nearly $10 trillion less than the U.S. GDP, the gap is clearly reflected in service prices rather than consumption volume. In terms of daily consumption, including cars, home appliances, clothing, building materials, food, meat, eggs, dairy, oil, gas, electricity, logistics, and passenger traffic, China’s absolute consumption far exceeds that of the U.S. However, the high costs of American education, healthcare, and legal services contribute significantly to its higher GDP. Healthcare alone accounts for about $5 trillion of U.S. GDP, while the legal industry contributes $1.5 trillion. In comparison, China’s healthcare industry is about one-fourth the size of the U.S., and the legal industry is only 1/50th the size.

In other words, the high U.S. GDP isn’t due to higher consumption but rather extremely high service costs, especially in high-end professional services like law, healthcare, and education. This also means that in the U.S., the legal industry’s client acquisition and fee models can still support massive costs. Even if AI diverts some demand, the overall market remains substantial. In contrast, while China’s ordinary legal services market is vast, the unit prices are lower, and users’ willingness to pay is limited. In many cases, the government subsidizes public-interest legal services, making it almost impossible for ordinary law firms to sustain the high costs of online channels. Thus, short videos become the only realistic path.

From a global perspective, the differences between the Chinese and American legal services markets reflect not only variations in industry structure and price levels but also the varying resilience of different markets to AI intervention. The high-end American market can tolerate AI diverting some business while maintaining overall profitability. In contrast, China’s mid-to-low-end demand, under the dual pressures of AI diversion and search engine ineffectiveness, has almost completely broken the traditional client acquisition model. Short videos, or any content channel that can directly reach users, have become the last public communication opportunity for small and medium-sized law firms to grasp.

How Long Can American Lawyers Hold On?

Although it seems that American lawyers can still rely on high fees for now, AI’s intervention is quietly changing the rules of the game. For ordinary civil cases, labor disputes, contract generation, and other needs, AI can already provide substitutable services, undermining the information asymmetry advantage lawyers once held. High-end cases may still require human expertise in the short term, but overall, AI’s ability to process tasks at scale is gradually eating into the market.

Comparing China and the U.S., China has about 40 million litigation cases annually, with the legal industry’s output valued at around 200 billion yuan (including both litigation and non-litigation work). The U.S., on the other hand, has about 80 million cases annually, with the legal industry’s output reaching $1.5 trillion. It’s worth noting that about half of U.S. cases involve traffic fines, with the high-value market concentrated in areas like civil compensation, commercial litigation, and criminal defense. This means that while the overall U.S. legal services market is vast, the number of cases that can generate high profits is limited. AI’s coverage of ordinary cases will directly compress the mid-to-low-end market where law firms can profit.

Simply put, the American legal services model faces significant challenges, and the existing pricing system, client acquisition channels, and profit margins are difficult to sustain. While being “defeated” by AI hasn’t happened yet, the trend suggests it’s only a matter of time. Law firms that understand AI’s value, adjust their business models, and embrace new channels may become the winners in the next landscape. Those clinging to traditional methods, relying on information asymmetry and high-cost advertising, are likely to gradually lose market space.

But in the end, it’s not just the legal industry that can be defeated by AI. When America’s inflated service industries are pierced by AI’s erosion of information asymmetry, GDP numbers—the biggest fig leaf for the world’s leading superpower—may soon be stripped away.