For too long, many law firms have operated without a sufficiently commercial mindset. Lawyers are trained in the practice of law, but a lack of investment in their ability to also understand the business of law is holding those firms back. Our own research from this year found that just one in three firms had programs to build their lawyers’ financial acumen, but the tide is turning, with more than 40% actively planning to introduce training in the next 12 months. In 2026, a key trend will be the non-negotiable development of that focused, business-oriented mindset - giving lawyers the commercial fluency to appropriately represent work value in client conversations and identify high and low profit behaviors that can significantly impact realization. The firms that fail to recognize (and optimize for) rising costs and increasingly stringent client demands will see margins squeezed and the likelihood of repeat business slipping through their fingers.

The firms that fail to recognize (and optimize for) rising costs and increasingly stringent client demands will see margins squeezed and the likelihood of repeat business slipping through their fingers.

In contrast, forward-looking firms are developing increasingly professionalized management teams with pay structures reflecting their fundamental importance to sustainable profitability. It’s likely we’ll see even more firms holding teams to account for financial metrics like aged WIP and AR and linking partner compensation to these. They are also investing in advanced business intelligence tools combined with savvy finance experts to optimize operational discipline and realize commercial control. Leaders understand that in order to maintain profitability, they must prepare ahead of time for changes in demand, rate squeezes, or macro-economic uncertainty. These will be driving factors that frame strategic decision-making in 2026.

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Last year, I shared that a major shift was beginning across the legal industry - one that would take time to fully materialize. As we move into 2026, that shift is accelerating. AI is now everywhere, generating meeting summaries, document analysis, and even early prototypes from tools that didn’t exist a year ago.

For firms, the challenge is no longer access to AI - it’s identifying what truly delivers value. Despite the hype, AI still requires disciplined data foundations, governance, and training before it can be trusted for decision-making.

That’s why 2026 will be the year AI becomes practical and productized, and why having a comprehensive data strategy, centered on the right data structure and hygiene, matters more than ever. Clean, consistent, centralized data is the backbone of reliable AI.

As AI matures, we’ll see BI evolve from dashboards to actionable, AI-driven recommendations.

As AI matures, we’ll see BI evolve from dashboards to actionable, AI-driven recommendations. Firms will standardize prompts, leverage centralized learning models, and adopt guided workflows that help users make decisions faster and with greater confidence. At BigHand, the work we’ve done, and continue to do, to strengthen our semantic models and unify firm data positions our BI platform to power suggestion-driven insights and embedded intelligence across workflows.

This progression leads to dependable, configurable AI solutions that firms can deploy out of the box - supporting everyone from novice users to firm leaders. And as more high-quality data feeds these models, the insights only get stronger.

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Looking ahead to 2026, I cannot help but think about how big a change the industry has been through in the last year. AI has gone mainstream, and firms are taking pressure from all sides to show efficiency gains and better outcomes from the use of AI-enabled technology. While I think 2025 was a year of testing and learning, and/or getting the right processes and systems in place, the coming year will see firms begin to reap those rewards. One of the challenges firms are facing as we leave 2025 behind, is clients’ inflated expectations of how AI is going to reduce hours/costs. The firms that will win in the new year will understand their costs of delivery, while pricing for outcomes which do not necessarily change based on efficiency gains.

Getting the basics right can deliver substantive gains that do not require upending the business model of the firm.

Keeping in mind that clients will be using new technology to further dissect their outside counsels’ billing practices, firms will need to get a better understanding of their data, client profitability, and pricing processes to stay on the front foot. It feels almost cliched to say, but without a solid understanding of the structure and location of a firm’s data, the best technology in the world will struggle to deliver the desired outcome. The firms that will continue to stay ahead will have solid measures in place to understand their profitability by customer, industry, practice group, etc. This will enable them to know where to place their bets for efficiency enhancements to drive profitable growth. This knowledge will also help them direct investments that can make a real impact to raise the profit in historically underperforming areas, while maximizing profit in their top-performing ones. Further, this will lead to a more disciplined approach to matter-level pricing/budgeting. With firms recognizing a 9% improvement in realization on matters that have budgets, it is a reminder that getting the basics right can deliver substantive gains that do not require upending the business model of the firm to deliver real benefits.

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