Strategic Sector Insights for the Legal Profession 2026
A report created in association with The Law Society, focusing on key financial statistics and trends from UK mid-sized legal firms.
Robert Blech, Head of Professional Practices
Our Strategic Legal Sector Insights Report has been developed in association with The Law Society, to capture key trends and insights from decision makers of medium sized law firms. It identifies the key strategic priorities for law firms in 2026, based on the results and feedback received from practices.
Partners and other senior representatives of mid-sized law firms with 8 to 50 partners in England and Wales, which generally operate on a national or regional scale, were asked to complete the online survey with questions covering their firms’ outlook and strategic priorities reflecting growth plans, people, technology, property, financial aspects, and ESG. Findings provide a highly valuable insight into the outlook of firm leaders without necessarily representing the views of all mid-sized firms.
This report looks at firm’s strategic priorities, comparing financial data such as charge out rates, turnover and lock up, as well as delivering a deeper understanding of firms’ technological growth and social development. Questions on borrowing give an insight as to how any organisational growth will be funded.
This report aims to help you identify strategic opportunities for your firm.
Ian Jeffery, Chief Executive of The Law Society England and Wales discusses the importance of the Strategic Sector Insights Report of 2026
Strategic outlook
12 months ago, in our report, mid-sized law firms identified talent retention, succession planning, technological advancement, and geographic expansion as key areas of focus over the coming year.
Similar trends have continued this year, although AI has become more prevalent in respect of technological advancement.
Historically, law firms have often lagged other professions when change is approaching. AI is an example of this, although with good reason and it is an area where solicitors must tread extremely carefully in order not to fall foul of the professional and ethical responsibilities as well as insurance considerations. This year’s report seems to indicate that the push to use AI is apparent across the vast majority mid-sized law firms.
The advantages for junior partners and potential new partner recruits may therefore by limited, especially if arrangements include lengthy tie down clauses and ignore other potential incentives. Such individuals may also see much of the profit they are working so hard at creating being paid out to the investors. In order to use PE effectively and ensure the ongoing success of a law practice, all partners and staff have to understand the potential benefits and buy into the process. As law firms are all too aware, without good people, the value of a practice is minimal.
MHA expert opinion: whilst partners and senior employees will be easily able to undertake the same work at home as in the office, this may not be the case for junior staff and trainees. Such staff will need to learn from the more experienced individuals within the firm."
What the financial results of the survey also reveal is that compared with last year there has been an uplift of 20% in the number of firms reporting an increase in turnover of over 5%, which is encouraging. The number of practices reporting net profit of up to £6 million has fallen by 14%, with an equivalent increase in firms reporting net profit of £6 million or greater. This indicates that whilst rising costs and wages are seriously impacting mid-tier firms, an accompanying increase in charge out rates reported in 2025 has helped to protect and improve profitability.
Technology
Technological advancements remain key to progression and growth for law firms, and this year more so than previously. On the question of whether firms are planning any significant IT software and hardware changes in the next 12 months, 65% responded that they were compared to 48% last year. This highlights the need to enhance how advice is given to clients and the speed at which responses are expected.
In addition, law practices are finding that they need to spend more in order to ensure they are protected sufficiently against any cyber-attacks, which unfortunately have become much more common. As the technology becomes more advanced and complex with varying platforms sharing data, the risks become greater too. Law firms have been fined for cyber-attacks that led to sensitive and confidential information being published on the dark web. In September 2025, the Law Society issued “Cyber Security guidance for Solicitors” which included recommendations for firms to get cyber certification. There are also insurance implications from potential cyber-attacks, and firms are investing in insuring against such incidents to the extent they are able to.
On the broader implications of AI we asked:
What is your perception as to whether AI will positively or negatively impact development of the following aspects of the solicitors’ profession in the next 5 years?
| Aspect | Positively impact | Negatively impact | Neither/unsure |
|---|---|---|---|
| Key principles & institutions | 33% | 14% | 52% |
| Talent development | 38% | 43% | 19% |
| Productivity | 94% | 2% | 5% |
| Scale of the workforce | 25% | 44% | 30% |
| Professions’ role in communities | 17% | 24% | 59% |
MHA expert opinion:
Law firms’ take on AI is no longer a question of if they will use it in some form, but how it will be implemented. As technology moves forward, so too must the profession. However, at this stage of its development, AI should be used with caution."
Growth plans including mergers and acquisitions
"2025 has seen a shift in the legal and wider professional practice landscape with PE investors taking more interest than ever before. This is impacting the thought process of partners relating to the value of their firms and reducing the attractiveness of the traditional merger model. In addition to delivering value to the equity partners in a firm, PE investment comes with funding to accelerate growth and investment."
If you have conducted or are considering a merger or acquisition, what are you hoping to achieve?
Displayed as a %
In what has historically been seen as a more cautious profession than others such as accountancy or property, we believe that two in every five firms surveyed being open to acquisition by PE indicates a noticeable shift in opinion. It was not very long ago that the thought of such a strategy would be given short shrift by industry leaders. As the PE driven M&A market gathers pace, firms will be faced with the decision of either staying as they are and gradually falling behind the competition or getting on the bus to keep pace. Interestingly, 24% of firms believe that an IPO is a viable option for a growing mid-sized firms - as they have likely seen the increased interest rippling though the accountancy sector - but this appears to be at odds with the feedback we are hearing anecdotally in the market. One of the factors behind this may be the perceived disadvantages of the PE route flagged by respondents.
What is your greatest perceived benefit of PE investment?
Download the full report
Download the full report
Our Strategic Legal Sector Insights Report has been developed in association with The Law Society, to identify the key strategic priorities for firms in 2026, based on the results and feedback received from practices of 8 - 50 partners in England and Wales.
Got a question about this report?
Contact our specialists who would be happy to discuss the contents of the report with you.
