That's pretty much how it works today; though there's not one single massive law firm because employment laws vary by state and city. But lawyers do specialize in this type of case at the city/state level, and it wouldn't surprise me if there is a "standard settlement" scale that says what % of annual salary the employer is willing to pay to make the case go away (I know this exists for auto insurance cases because I used to have a client who was a stereotypical ambulance chaser).

But generally you're right -- when you sue someone, only the lawyers win. At a minimum, a cursory background check would turn up the lawsuit and potentially damage your chances at getting another job. It's the same as with whistleblower cases: you have to ask yourself if the injustice you're trying to correct is so big that it's worth potentially destroying your career (whistleblower laws promise huge rewards for exposing behavior but they can be very difficult to collect on and generally make you unhireable).

That said, if a specific company (like Amazon/Google are rumored to do) routinely does things like this, they could face a class action suit. Class action suits are a company's worst nightmare because they are run by the lawyers -- who have every incentive to be as public as possible about the proceedings. Dragging a company's name though the mud in the media is a good way to get them to settle on your terms, and the former employees aren't at the forefront of the case so there's little downside to it. It actually wouldn't surprise me if we see a class action suit come out of this; this kind of treatment is common enough in the tech industry and there's a lot of money on the table if a law firm can put together a case. But again, in a class action suit the lawyers keep most of the money, so ultimately they're the biggest winners.