Legal advice: More to come in 2026
The legal services market will grow across all practice areas in 2026 for the first time since Covid, researchers have predicted.
A growing private equity presence was “a continuing theme”, with an estimated 31% of mergers and acquisitions identified in the past year involving “either new investments by private equity businesses or private-equity backed law firms”.
IRN Legal Reports calculated that the value of the legal services market would increase by 6.8% this year, taking its total value to £59bn.
The average growth rate from this year to 2029 is expected to be 5.5%, with the total value reaching £69bn in 2029.
The UK Legal Services Market Report 2026 [1] said that after “a period of restructuring and weak growth” for personal injury and medical negligence firms, there were “signs that leading firms at least are experiencing some growth”.
Claims volumes were expected to grow for serious injury and complex cases but road traffic accident claims numbers would continue to struggle – we reported last week [2] that they had fallen to their lowest ever level.
“Costs and processing efficiencies, supported by IT investment in recent years, will help to drive revenue and profits growth for many of the leading players. Some of the smaller firms may struggle to find enough worthwhile cases.”
Personal injury firms were likely to make increased use of AI, particularly in the high-volume, low-value part of the market.
“Applications include assistance with decision-making regarding case selection, reviewing records to quickly identify key information, and support with client interaction.
“Again, it is the firms which have the financial resources and data required to make effective use of AI that will be able to reduce costs and be provided with a competitive advantage.”
IRN expected “steady growth” this year for corporate law, the largest practice area when combined with commercial property, making up 51% of the total value of the market.
A “healthy” number of mergers and acquisitions were anticipated this year, while financial pressures on businesses would create demand for insolvency and corporate restructuring experts, along with tax advice.
Investment in commercial property was predicted to increase by over 10% in 2026, with industry and logistics sectors leading the way.
“Litigation covering AI-related disputes is also expected to become an emerging area,” the report went on.
Researchers said they expected last month’s cut in the base interest rate to “improve market sentiment” in residential conveyancing, helping “more people secure mortgage financing in 2026 with more interest rate cuts likely in the next year”.
A “steady flow of revenue” was expected in employment law, with “regular demand from businesses and organisations for employment and HR advice”. However, the sector was “extremely competitive and switching between advisers is not uncommon to save costs”.
Growth in the family law market is “set to continue” this year, as financial remedies after a divorce, domestic abuse, and Children Act matters continued to generate demand.
Meanwhile, wills and probate work would continue to benefit from an ageing population, particularly probate services, lasting powers of attorney and other guardianship advice.
More adults living longer “should boost demand for other services as well” such as living wills, funeral plans, and care plans.
The report listed 62 law firm mergers and acquisitions in last year year, of which 19 (31%) involved either private equity taking a share in a law firm or private equity backed law firms acquiring other law firms – higher than in previous years.
“Leading the way has been Lawfront which has expanded its presence in the legal services sector in the last year with five deals. Private equity funded Fletchers has been involved in four deals including its first move into family law.
“An emerging law firm group is Beyond Law Ltd (Waterland Private Equity has a minority share). Formed in 2017, Beyond Law now has five specialist law firms.”
Both Lawfront and Beyond Law will be speaking at our Law Firm Growth Summit [3] on 18 March in London. Early bird tickets are available until Friday.