Despite rising costs driven partly by AI investment, the large law firm sector is posting another year of robust financial performance across key metrics.
New findings from the Citi Global Wealth at Work Law Firm Group show law firms grew their revenue by 11.7% during the first half of 2026, a striking result by any measure.
Demand rose 4.2% over the same period, comfortably exceeding the historical average growth rate of between 1.5% and 2%, signalling broad strength across the sector.
The numbers point to sustained client appetite for high-end legal services, even as economic uncertainty has weighed on other parts of the professional services market.
Total expenses climbed 9.7% during the first half, representing a meaningful cost burden that firms will need to manage carefully as the year progresses.
Increased investment in artificial intelligence was cited as a contributing factor to the rise in expenses, reflecting a wider trend of Biglaw firms racing to integrate new technology into their practices.
The expense pressures have not dampened confidence among industry observers, with early data from the third quarter already suggesting the momentum is continuing.
Daniel Greenfield, a director in Citi’s law firm advisory group, offered an optimistic assessment of where the industry stands heading into the second half of the year.
“We anticipate it is going to be a strong year for the industry despite the expense pressures,” Greenfield told Bloomberg Law, commenting on the latest Citi findings.
“Early indications suggest demand continues to be strong in the third quarter as well,” Greenfield added, reinforcing expectations that 2026 will deliver another standout year for the sector.
The strong revenue figures build on several years of exceptional performance for large law firms, which have benefited from elevated rates and persistent client demand for complex transactional and litigation work.
AI spending, while pushing costs higher, is widely viewed across the industry as a necessary investment to remain competitive and meet client expectations around efficiency and speed.
Firms that manage the balance between rising expenditure and continued revenue growth will be best positioned to capitalise on what is shaping up to be a highly profitable year.