chinese-war.com

A 2027 U.S.–China conflict with Australia aligned to the U.S. China trade stops immediately, Taiwan exports are slowed/limited, and China launches large-scale cyber disruption in waves. This is a planning scenario, not a forecast. Planning scenario, not a forecast. No end date is set.

Legal Services — United States (Investor-Grade, Downstream Focus)

Read the Australia briefingReport date 2026-11-07

What happens

What leaves the file, what keeps being billed, and what the court still takes

  1. China trade stopping removes instructions from Chinese clients and stops new cross-border deals that need a Chinese party. The corporate and mergers shares above are the whole sample, not a China slice. The China-client share of hours is unpublished. It is not derived from the corporate-hours share of 24 percent. The domestic docket figures stay the measured continuation book.

    thomsonreuters.comuscourts.gov

  2. Sanctions and export-control advice moves the other way. Clients already produced 14 public OFAC outcomes in 2025 totaling 265,746,819 dollars. That dollar figure is government penalties and settlements. It is demand for advice. It is not law-firm revenue.

    ofac.treasury.gov

  3. Domestic litigation does not clear through a Chinese buyer. Litigation was 27 percent of the prior-year billable-time proportion, larger than corporate work at 24 percent. District-court civil case filings were 303,563 in fiscal year 2025.

    thomsonreuters.comuscourts.gov

  4. Taiwan in this industry is a practice and a matter book. The Taipei page lists Micron's concurrent acquisitions of Elpida at 2.5 billion dollars and Rexchip at 335 million dollars, Micron's take-private of Inotera at 6 billion dollars, the Hermes Microvision sale to ASML at 3.1 billion dollars, and the SPIL and ASE holding-company transaction at 5.7 billion dollars. Those are historical matter values on the firm page. The Taipei list is historical, not a fee run-rate.

    jonesday.com

  5. A slowed Taiwan export book shows up as fewer new cross-border instructions for the Taipei office, not as a missing chip inside the law firm. The page does not print a Taiwan share of U.S. large-firm revenue. A foundry share is not used.

    jonesday.com

  6. The week-1 operating break is the client file and the time-and-billing system. Paralegals maintain and organize files. The handbook says legal services employs 75 percent of paralegals and legal assistants. The subpoena request applied to 298 public company and other SEC-regulated clients. The opinion dates the malicious activity over the course of approximately four months and does not print a day count. The CISA lawyers page has no day count. The labeled foreign analog is a calculated publication gap of 39 days.

    bls.govcisa.govcourtlistener.comnsw.gov.au

How hard, how soon

0–3 months

  • Short-horizon billing analog, labeled as a quarter: the third quarter was a 3.9 percent year-over-year demand increase for the average firm. Demand means total billable hours. The same page's July print of 4.4 percent is a monthly peak inside the year and is not the only figure in this band.

    thomsonreuters.com

  • Short-horizon employment analog, labeled as a month: October 2026 legal-services employment was 1,251.2 thousand persons, seasonally adjusted, after 1,248.8 thousand in September 2026. This is a payroll count, not a rate.

    fred.stlouisfed.org

  • Under-one-quarter file analog, labeled foreign. The labeled foreign analog is a calculated publication gap of 39 days. The CISA lawyers page has no day count. The opened U.S. opinion does not print a day count. The 3.9 percent quarterly demand print is a billing analog beside this day span, not the only figure in the band.

    nsw.gov.aucisa.govcourtlistener.com

1–6 months

  • Accumulated price analog: worked rates increasing 7.3 percent over the year. Talent cost was up 8.2 percent. Both are full-year prints used here as the one-to-six-month cost band, not as the one-quarter hours print.

    thomsonreuters.com

  • The opened U.S. firm incident sits in this longer band because the opinion says the hackers undertook a series of malicious activities over the course of approximately four months. The subpoena request applied to 298 public company and other SEC-regulated clients. The opinion describes an internal investigation involving nearly 500 hours of attorney time. The opinion does not print a day count. The CISA lawyers page has no day count.

    courtlistener.comcisa.gov

12+ months

  • Long-horizon earnings analog: 13.0 percent profit growth for the average firm, with headcount growth of 2.9 percent. The Am Law 100 headcount path since January 2023 was 5 percent. None of these is a China-desk profit.

    thomsonreuters.com

Wave 1

Wave 1 direct is the China-desk client file and the Taipei, Beijing, and Shanghai matter file. Wave 1 indirect is the corporate and mergers team that cannot read that file, and the district court that does not receive the filing. The subpoena request applied to 298 public company and other SEC-regulated clients. The CISA lawyers page has no day count. The labeled foreign analog is a calculated publication gap of 39 days. CISA's lawyers page does not set this order. The order is a planning model.

cisa.govjonesday.comuscourts.govcourtlistener.comnsw.gov.au

Wave 2

Wave 2 direct is time-and-billing and the sanctions matter system. Wave 2 indirect is the paralegal and legal-process layer, about 404,900 jobs, which stops when the file store stops. The hourly share of 90 percent is why a billing outage is cash, not just inconvenience. This order is a planning inference.

thomsonreuters.combls.govcisa.gov

Wave 3

Wave 3 direct is the distributed set: 76 midsize firms in the sample and self-employed lawyers at 11 percent of lawyer jobs. Wave 3 indirect is litigation's dependence on a rebuilt file after the first outage. This order is a planning inference.

thomsonreuters.combls.govcisa.gov

Country exposure

origin sharepercent

Cost and price shock by time bucket

price changepercent

Downstream scale

workforcepeople

affected clientsclients

firmsfirms

Operating prints

daysdays

ratespercent

What to do

Day 7

  • List open matters that need a Chinese party or a Beijing or Shanghai office, against the fact that the China-client hours share is unpublished and the opened offices are the Jones Day pair plus Taipei.

    jonesday.comthomsonreuters.com

  • Put client-file and time-and-billing systems on the week-1 watch. The hourly model is 90 percent of legal dollars. The subpoena request applied to 298 public company and other SEC-regulated clients. The CISA lawyers page has no day count. The labeled foreign analog is a calculated publication gap of 39 days.

    thomsonreuters.comcisa.govcourtlistener.comnsw.gov.au

Day 90

  • Decide which Taipei matters can be staffed from other offices if Taiwan-related instructions slow. The Taipei list is historical, not a fee run-rate.

    jonesday.com

  • Revisit rate and realization. Worked rates increasing 7.3 percent over the year and associate realization at 85.6 percent are the baselines. A China-desk write-off should not be hidden inside the firm-wide rate.

    thomsonreuters.com

What to watch

By role

China-desk partners

  • Split open matters into China-party and non-China before week 1.

  • Do not treat the corporate hours share of 24 percent as the China loss.

  • Name which Taipei, Beijing, and Shanghai matters can move to another office.

thomsonreuters.comjonesday.com

General counsel

  • Ask outside counsel for a file-export drill, because the model is 90 percent hourly and the file is the record.

  • Move routine work using the already observed path toward firms charging in many cases 40 percent less.

  • Open a sanctions workstream against the 2025 enforcement baseline rather than waiting for a new statute page.

thomsonreuters.comofac.treasury.govcisa.gov

Legal-process outsourcers and paralegal managers

  • Stage an offline file copy for matters in suit, against the civil docket of 303,563 filings.

  • Treat the about 404,900 paralegal jobs as the in-firm process layer that stops when the store stops.

bls.govuscourts.gov

Litigation and sanctions partners

  • Keep a separate staffing plan for the 27 percent litigation share.

  • Do not book the 265,746,819 dollar penalty total as firm revenue.

thomsonreuters.comofac.treasury.gov

Weekly checks

What is not known

Working papers: node summary
NodePrimary impactTime horizonCyber waveEvidence
Am Law 100 China desksChina-client matters stop, and the top of the rate card does not have a printed China-hours share to resize.0-3 monthsWave 1 (direct)Thomson Reuters 2026 legal-market report; CISA lawyers page
Taipei and Mainland China officesThe opened Taipei matter book and the Beijing and Shanghai offices lose cross-border instructions.0-3 monthsWave 1 (direct)Jones Day Taipei and careers pages
Client-file and billing systemsInvoices stop on a book that is still hourly, even when the lawyer has finished the work.1-6 monthsWave 2 (direct)Thomson Reuters Legal Tracker hourly share
Sanctions practicesAdvice demand rises off a public enforcement baseline while the underlying deal work falls.0-6 monthsWave 2 (direct)OFAC 2025 civil-penalty chart
Corporate and M&A teamsNew cross-border deals that need a Chinese party stop; the rest of the corporate book is not measured as China.0-3 monthsWave 1 (indirect)Thomson Reuters practice-demand shares
U.S. district courtsThe civil docket stays open, and filings fail only when counsel cannot reach the file.0-3 monthsWave 1 (indirect)Judicial Business 2025
Paralegal and legal-process teamsFile maintenance and document drafting stop when the matter system stops.1-6 monthsWave 2 (indirect)BLS paralegal handbook
Litigation practicesDomestic litigation continues and is the largest practice share in the sample.0-12 monthsWave 3 (indirect)Thomson Reuters litigation share; Judicial Business 2025
Midsize firmsMidsize firms are the observed sink for work leaving the top rate card, and their own files are a later target.1-6 monthsWave 3 (direct)Thomson Reuters segment demand
Self-employed lawyersThe solo book is a large share of the occupation and a thin system.1-12 monthsWave 3 (direct)BLS lawyer handbook

Sources