New HSBC UK and Briefing research finds legal firms remain ambitious and are prioritising disciplined investment, effective AI adoption and operational efficiency.
UK law firms remain focused on growth into 2027, but are taking a measured approach as artificial intelligence, talent constraints, geopolitical risks and changing client behaviour reshape strategic decision-making.
The findings are published today in the HSBC UK Law Firm Strategy and Investment Survey 2026/2027. The research surveyed more than 100 senior leaders from UK law firms. The top 100 UK legal firms generated £37 billion of the sector’s total revenue of £52.3 billion and employ 368,000 people.
Key findings
- 56% expect revenue growth of 6–10%, while almost one-third anticipate growth of 11–15%.
- 73% identify effective AI integration as a major organisational challenge.
- 83% expect technology investment to increase, with average technology spending at 6.1% of annual revenue.
- 87% plan to make lateral hires in existing markets, while 63% expect to recruit in new geographies or specialisms.
- 84% expect mergers and acquisitions across the UK legal sector to increase over the next 12 months.
- 88% identify banks as the most likely source of growth funding, compared with 11% for private equity.
Growth remains firmly on the agenda, although firms are becoming more selective about where they invest. 59% identify UK-focused growth as part of their strategy, while 38% are pursuing international growth. The UK is the leading regional investment focus, named among the top four priorities by 94% of respondents.
Firms continue to pursue commercial expansion through targeted lateral hiring, sector development and acquisitions. More than half expect revenue growth of 6–10%.
AI has moved from experimentation to an enterprise-wide challenge. Almost every firm has a generative AI strategy, but leaders are now focused on embedding the technology securely and effectively across their businesses. Key barriers include the time and opportunity cost of exploring the market (37%), implementation workloads involving legacy systems and data (35%), cost (29%) and uncertainty over return on investment (27%).
Victoria Ritchie, Head of Professional and Business Services at HSBC UK, said:
“The legal sector continues to demonstrate resilience and commercial ambition, but this year’s findings show that firms are navigating a more complex operating environment. The opportunity presented by AI is substantial, yet converting investment into secure, measurable and commercially valuable adoption will require strong leadership, collaboration and disciplined execution.”
Technology-enabled competition and pressure to improve efficiency are also driving expectations of further consolidation. 84% anticipate more mergers and acquisitions over the next 12 months, although only 5% are actively exploring private equity investment. The limited liability partnership remains the preferred structure, favoured by 81% of respondents.
Financial discipline is becoming increasingly important, with 48% reporting greater pressure on working capital. Almost half see potential for AI or automation to improve financial processes such as time recording, billing and collections. Client demand for alternative pricing remains led by fixed and capped fees (68%), followed by hybrid arrangements (33%), while only 16% see increased demand for value-based pricing.
The survey was conducted in partnership with Briefing during summer 2026 and gathered responses from more than 100 senior strategic decision-makers across the UK legal market.
