Key insights:

• • • UK law firms face a more selective growth market in 2026聽鈥� Client demand remains steady, but external legal spend expectations have cooled, with growth concentrated in areas such as Regulatory, Labor & Employment, and international work.

    • Legal expertise alone is no longer enough 鈥� UK legal buyers increasingly favor law firms that combine technical excellence with commercial judgment, business understanding, and practical guidance aligned to client priorities.

    • AI adoption is becoming a client expectation聽鈥� Corporate legal teams are moving faster than their outside law firms on GenAI, and many UK legal buyers now expect outside counsel to use AI to improve efficiency, workflows, and the quality of legal work.

The legal market in the United Kingdom today has shifted into a new normal. While law firms saw an explosion of demand and spending immediately following the pandemic, increasing client caution has resulted in a shift in priorities. Today鈥檚 law firms cannot simply rely on their old ways of providing legal service to succeed, as UK clients expect firms to combine expertise, commercial judgment, international reach, and visible AI-enabled improvements in how legal work is delivered.

Jump to 鈫�

2026 State of the UK Legal Market

A new report from the 成人VR视频 Institute, “2026 State of the UK Legal Market,” reveals how the UK legal market is shifting, as more judicious clients are beginning to force law firms to reassess their strategy. Overall anticipated net spend from legal clients has seen declining growth rates in recent years, and while some practices like Regulatory and Labor & Employment continue to see strong demand growth, other practice areas such as Insurance, IP, and Disputes face potential contraction.

This shift is also guided by emerging buyer preferences. The report reveals an increasing commerciality to the UK legal market, one in which clients increasingly favor advisors that combine legal excellence with commercial judgement, and those that are leveraging AI to bolster not only efficiency but improve the overall legal work product.

Taken as a whole, the report paints a picture of clients that now are moving faster than their outside legal advisors, strengthening their internal capabilities, and setting clearer (and higher) expectations. This means that UK law firms cannot rest on their laurels, as clients increasingly push their outside firms to keep up with new business challenges.

The market is cautious, but opportunity remains

The report reveals that UK legal buyers are more cautious about external legal spend than they have been at any point in the last five years. That may mean law firms can no longer rely on the broad-based demand that defined the post-pandemic period and instead need to be more precise about where opportunity exists 鈥� and where it doesn鈥檛.

The report tracks buyer sentiment through net spend anticipation (NSA), which measures the share of buyers expecting to increase external legal spend over the next 12 months minus those expecting to decrease it. Since its 2021 peak, UK NSA has fallen steadily to +5 percentage points in 2025, returning the market to the more stable, single-digit baseline that was seen before the pandemic.

For those law firms looking to capture increased business, the report makes clear that legal expertise is now the price of entry, not the point of differentiation. The firms that stand out will be those that know how to apply their expertise in ways that reflect the client’s business realities.

Indeed, that is becoming even more important as corporate legal departments face growing pressure to demonstrate their own value to the wider organization, and they鈥檙e increasingly pointing to improvements in their own quality and effectiveness even before mentioning cost savings, efficiency, or time savings. Not surprisingly, more than one-third of UK legal buyers now cite business savviness as a reason they favor a particular law firm.

To help demonstrate their internal value, clients are pushing their outside law firms to leverage advanced technology to improve the overall effectiveness of legal work. Of course, this has resulted in a clear gap, the report notes, between how corporate legal teams are moving and how law firms are responding. For instance, the report shows that more than half of UK corporate legal respondents say their organizations are already using GenAI tools across the business, compared with just about one-third law firm respondents who said this.

That difference in outlook matters because clients increasingly believe AI will become a larger part of how legal work is delivered, and they鈥檙e not content to simply wait and see whether their outside counsel will fully adopt the technology. Indeed, corporate legal departments are expecting their outside law firms to keep pace with how legal work is changing, and they will reward those firms that do.

You can download

a full copy of the 成人VR视频 Institute’s “2026 State of the UK Legal Market” by filling out the form below:

Key findings:

• • • Pricing and demand are exceptionally strong, but profits aren鈥檛 keeping up 鈥� Despite worked rate growth reaching above 12% for the largest of the Am Law 100 firms and demand growth hitting almost three-times its historical average, the LFFI landed at a flat 55, its own long鈥憆un historical average.

    • Rising costs, falling productivity, and geopolitics are quietly offsetting gains 鈥� Overhead expenses climbed, productivity slipped back into contraction, and a widening performance gap between large firms and the rest dragged on overall results; meanwhile, the Iran war appears to be dampening demand on the edges of both transactional and counter-cyclical work.

    • The market is splitting sharply by segment 鈥� Am Law 100 firms continue to drive pricing power and lead technology investment, while Midsize firms have seen rate growth slow, demand lag, and costs rise faster than revenue, all reinforcing an increasingly scale鈥慸riven competitive divide.

The 成人VR视频 Institute鈥檚 Law Firm Financial Index (LFFI) for the first quarter of 2026 landed at 55, exactly matching the long鈥憆un historical average since the Index began tracking the market in 2006. On its face, that may sound unremarkable; but dig one layer deeper, and Q1 2026 becomes one of the more puzzling quarters we鈥檝e seen in years.

Jump to 鈫�

Q1 2026 Law Firm Financial Index

Let鈥檚 start with the inputs. Am Law 100 firms pushed worked rate growth to almost 10%, building on an already record鈥憇etting 2025 and marking one of the strongest pricing environments in recent memory 鈥� and at the very top of the market, the largest law firms cleared 12%-plus rate growth. Meanwhile, demand clocked in at 2.7%, nearly triple the industry鈥檚 long鈥憆un average.

Clearly, these are not average conditions by any stretch. And yet, the LFFI score 鈥� a composite output of law firm financial performance 鈥� remained stubbornly ordinary.

So, what鈥檚 eating the gains? It turns out that the answer is multifold. For example, the report cites climbing overhead expenses, productivity that has slipped back into contraction after six months of gains, and a growing performance gap between the largest firms and everyone else 鈥� all joined forces to drag down the LFFI score.

On top of that, a new geopolitical variable 鈥� the ongoing war in Iran 鈥� weighs heavily, darkening the storm clouds further. Early indicators suggest the conflict is blunting both sides of demand at once, the report notes, freezing both the transactional M&A work that thrives on confidence and the counter-cyclical restructuring work that thrives on distress. When both the upside and downside stall simultaneously, strange results likely will follow.

The segments鈥� strategy split

Indeed, one of the clearest stories of Q1 is how sharply law firm segments are splitting apart. After years of moving largely in lockstep, pricing strategies diverged in Q1. Am Law 100 firms, for example, leaned hard into rate growth, while Midsize firms slowed their rate growth, marking the first deceleration in rate growth for any segment since 2021. Meanwhile, the Second Hundred held steady, neatly threading the middle.

This nuance matters. Large firms continued raising standard rates faster than worked rates, accepting deeper discounts to move the prices clients paid higher. Midsize firms did the opposite 鈥� allowing standard rates to lag while negotiated rates rose 鈥� signaling restraint. Midsize firms鈥� strategy may have been to capture price鈥憇ensitive demand migrating down鈥憁arket; but in practice, it hasn鈥檛 worked. Midsize firm demand growth now trails the Am Law 200 average, expenses are accelerating faster than revenue, and productivity per lawyer is declining. As a result, profit growth for the segment is running at roughly half the pace of its Am Law peers.

Rain in the forecast?

Demand, meanwhile, still remains above historical norms, even as a few raindrops are starting to fall. While several practice areas contributed meaningfully, the mix of transactional and counter鈥慶yclical practices are growing at nearly the same pace, signaling not balance, but simultaneous deceleration. Add in tough year鈥憃ver鈥憏ear comparisons against early鈥�2025鈥檚 demand surge, and the growth picture going forward becomes more stormy.

As the report makes clear, the takeaway from Q1 is not that the market is in trouble, but rather that momentum is slipping under the surface. A score of 55 isn鈥檛 a storm warning siren; it is, however, an odd resting point for a market with inputs this strong. The question for the legal market moving forward is simple: Is this just a passing sprinkle 鈥� or the first sign of a heavier storm?

You can download

a full copy of the 成人VR视频 Institute’s “Q1 2026 Law Firm Financial Index” by filling out the form below:

Key takeaways:

• • • New Zealand legal market achieves revenue and profit growth 鈥� A new TRI report on the New Zealand law firm market shows firms rebounding strongly from the pandemic, with firm revenue and profits up impressively.

    • Transactional and counter-cyclical practice demand drives success 鈥� More than half of the legal demand for New Zealand law firms comes from transactional work, which rose of the past year; meanwhile, counter-cyclical practices saw even higher growth rates.

    • Managed expenses and increased partner utilisation boost profit margins 鈥� Despite rising expenses due to technology and knowledge management investments, New Zealand law firms maintained manageable costs and increased equity partner utilisation.

For New Zealand law firms, years of careful investment and strategic pandemic recovery have paid off. Today, strong demand has vaulted firm revenue growth above double digits, leading to profits not seen among New Zealand firms since the early days of the pandemic, according to a new report from the 成人VR视频 Institute (TRI) and data from TRI鈥檚 .

Jump to 鈫�

2026 Report on the State of the New Zealand Legal Market

Demand at New Zealand law firms rose more than 5% last year, following stagnant or decreasing growth rates between 2022 and 2024, according to TRI鈥檚 2026 Report on the State of the New Zealand Legal Market. As a result, overall firm revenue rose by more than 10%, placing it back near pre-pandemic levels. Coupled with managed expense growth, New Zealand law firms saw their first double-digit profit growth since 2021, after declines in demand for transactional practice work scuttled profits in 2022 and 2023.

Overall, more than half of the legal demand for New Zealand law firms comes from transactional work such as corporate general and M&A practices; and indeed, demand for such work rose last year after seeing only modest growth or declines in the the years prior. However, the report shows that even more notable is the rise of demand in counter-cyclical practices such as disputes & litigation, insurance defense, and workplace relations. The growth rate of counter-cyclical demand topped that of transactional demand in the second quarter of last year and continued to separate itself throughout the remainder of the year.

At the same time, firms continued to enjoy steady rate growth, with their worked rate growth over this past year coming close to their average rate growth than was seen from 2022 to 2024.

Interestingly, this represents a different strategy by New Zealand firms, compared to those in the United States or Australia, to capture profits through other means while keeping their rate increases manageable. And indeed, while Australian and US firms have largely seen falling utilisation, New Zealand equity partners averaged more hours worked per month in 2025 than they did the year prior, which helped to drive higher revenues.

Meanwhile, total expenses ticked up slightly last year compared with 2024, with both direct expenses and indirect expenses rising. However, much of this growth in indirect expenses is largely due to increased investments in technology and knowledge management, an increasingly necessary expense in the age of AI.

As a result of the demand rebound and more manageable expenses, New Zealand law firms are seeing their revenues and profits soar.

Overall revenue more than doubled, percentagewise, in 2025, which in turn directly led to sky-high profits in 2025 that were almost triple what they were the year prior. Profit per equity partner also saw similar gains.

Overall, New Zealand law firms on average largely held steady with a profit margin around 43%, while some firms saw profit margins soar above 50%.

As the report shows, all of this represents a very positive financial picture for New Zealand law firms. The return of demand, steady rate growth, and managed expenses has provided firms a solid footing from which to grow further. And if New Zealand law firm leaders can build on those positive metrics, they look poised to take these gains and grow further in 2026.

You can download

a full copy of the 成人VR视频 Institute’s “2026 Report on the State of the New Zealand Legal Market” by filling out the form below:

Key takeaways:

• • • Disconnect between legal departments and C-Suite perceptions 鈥� While many general counsel believe their departments are significant contributors to business success, most C-Suite executives do not share this view. Fully 86% of GCs say they believe their department is a significant contributor, but only 17% of C-Suite executives agree.

    • A need to find new ways to demonstrate value 鈥� Legal departments are under increasing pressure to do more with less, as nearly half of GCs surveyed cite staffing and resource constraints as their top barrier to delivering additional value. Despite these limitations, expectations from the C-Suite continue to rise.

    • AI adoption accelerates, business strategy comes next 鈥� Legal departments are rapidly embracing technology to improve efficiency, manage resources, and address cost pressures. Not surprisingly, the proportion of GCs calling AI a strategic imperative has doubled.

Over the past several years, general counsel and corporate law departments at large have transformed their operations. Many have become more efficient enterprises, leveraging technology, in particular AI, at an increased pace. GCs have adjusted their hiring practices to conform with the modern corporation, taking new ways of working into account. And they have embraced data-driven decision-making, evaluating outside counsel and their own operations alike with a wider suite of new metrics and KPIs.

But do you know who hasn鈥檛 yet realized the fruits of that labor? The corporate C-Suite.

Jump to 鈫�

2026 State of the Corporate Law Department Report

The , released today by the 成人VR视频 Institute, reveals a disconnect between how GCs and their corporate law departments view their own alignment to the wider business, and what C-Suite executives believe the legal department contributes. Within this gap, the message is clear: GCs not only need to align with their organizations鈥� overall business strategy, they need to learn how to prove that alignment to the rest of the company.

Indeed, when asked how they view legal鈥檚 contribution to the rest of the business, 86% of GCs surveyed said they viewed the legal function as a significant contributor. However, only 17% of other C-Suite executives said the same 鈥� and 42% said legal contributes little or not at all.

As the report explains, this disconnect lays the inherent groundwork for the tension facing many GCs today. While they are increasingly aiming to align to business standards, the rest of the organization is not recognizing those actions. Instead, many C-Suites are looking for even more out of today鈥檚 legal departments to prove their contributions to organizations鈥� business imperatives.

As in past years, many in-house legal departments are being tasked to do more with less. Nearly half of GCs cited staffing and resource constraints as the top barrier they face to delivering additional value. Indeed, many said they expected outside counsel spend in some key areas 鈥� such as regulatory work and mergers & acquisitions 鈥� to remain high. As of the fourth quarter of 2025, more than one-third (36%) of GCs said they expect to increase overall spend on outside counsel over the next year, while only 20% said they plan to decrease their spend.

Despite legal departments’ gains, their C-Suites are looking for them to take the next step, turning operational excellence into business success.

Not surprisingly, many GCs said they view technology as one of the primary ways they have to combat these resourcing and cost issues. In fact, the proportion of GCs mentioning technology as a strategic priority entering 2026 doubled over the year prior. Legal departments have begun to feel positive effects of AI in their own organizations, the report notes, such as increased efficiency or time feed up for strategic work.

Despite these gains, C-Suites are looking for are looking for their legal functions to take the next step, turning operational excellence into business success. This can take a number of different forms, such as explicitly tying advice to client business objectives, presenting legal spend in the context of the business by showing it as a percentage of revenue, or approaching risk management with the goal of aiding business imperatives. 鈥淲hen we have a risky legal subject, the company never prefers just to see the legal opinion,鈥� said one retail GC. 鈥淭hey鈥檙e also requesting you to drive them how to make a decision.鈥�

AI and technology should also be approached in this same way, the report argues. Although almost half of all corporate legal departments have some type of enterprise-wide GenAI tool, according to the survey, very few are collecting success metrics around AI鈥檚 implementation or linking its use to business revenue. Put a different way, many legal departments are focused on unlocking capacity, rather than deploying capacity in a business-centric way 鈥� much to the chagrin of their C-Suites.

Although legal departments have established a solid foundation upon which a business can stand, ultimately, C-Suites don鈥檛 want just a foundation. They want help building the entire house, the report shows, directly enabling the services that companies provide to customers. In that, GCs and legal departments have more work to do, not only tying strategy to overall business initiatives but actively communicating how the legal function鈥檚 work aids the company as a whole.

You can download

a full copy of the 成人VR视频 Institute’s “” here

Key insights:

• • • Possibilities vs. practicality 鈥� There is a growing frustration gap between what corporate tax professionals want to achieve and what their current technological tools will allow.

    • Expectations about AI 鈥� Tax professionals have significantly accelerated the timeframe in which they expect AI to become a central part of their workflow.

    • Proactive progress 鈥� Automation is enabling a gradual shift toward more strategic, proactive tax work, although not as quickly as many tax professionals would like.

The recently released , from the 成人VR视频 Institute and Tax Executives Institute, reveals that while automation of routine tax functions is indeed enabling a long-desired shift toward more strategic, proactive tax work in some corporate tax departments, a majority of tax leaders surveyed say upgrading their department鈥檚 tax technology is still a relatively low priority at their company.

Jump to 鈫�

2026 Corporate Tax Department Technology Report

The report surveyed 170 tax leaders from companies of all sizes to find out how corporate tax professionals are using technology, overcoming obstacles, and planning for the future.

A growing 鈥渇rustration gap鈥�

In general, the report found that while many companies (especially larger ones) are actively upgrading their tax department鈥檚 technological capabilities, there is a growing frustration gap between what tax professionals know they can accomplish with more robust technologies and what their current tools allow them to do.

Adding to this frustration is a growing discrepancy between the additional budget and resources tax departments hope to get each year and the harsher reality they often face. Indeed, even though tax leaders remain optimistic that their budgets and capabilities will expand and improve in the coming years, fewer than half of the respondents surveyed said their departments received a budget increase last year, and many saw budget cuts.

Further, the report shows that the prospect of incorporating ever more sophisticated forms of AI and AI-driven tools into tax workflows is also very much on the minds of tax professionals. Even though the actual usage of AI in corporate tax departments is still relatively low, the report reveals that tax professionals now expect AI become a central part of their workflow within one to two years, much faster than they did in last year鈥檚 report.

Indeed, as the report explains, this expectation of more imminent AI adoption represents a significant shift in attitude, because most corporate tax departments are rather circumspect about how, when, and why they incorporate new tech tools into their established routines.

If today鈥檚 technological capabilities continue to accelerate, companies that have been slow to invest in the infrastructure necessary to keep pace may soon find themselves struggling to catch up with their more tech-savvy counterparts, the report warns.

Moving toward more proactive work, albeit slowly

For companies that have invested in the technological infrastructure necessary to support advanced tax technologies, the payoff is becoming increasingly evident.

According to the report, about two-thirds (67%) of tax professionals surveyed said their company鈥檚 investment in technology had enabled a shift toward more proactive tax work within their departments. This shift is particularly noticeable at large corporations, at which, unsurprisingly, investment in tax technology has been more generous.

The 2026 Corporate Tax Department Technology Report also explores other aspects of corporate tax departments, including their hiring practices, tech training, purchasing strategies, what they see as the most popular tech tools for tax, and numerous other factors that affect how tax departments operate.

You can download

a full copy of the 成人VR视频 Institute’s here

Key findings:

• • • The market remains strong, but growth is difficult 鈥� Australian law firms are still posting solid demand and rate growth in the first half of FY 2026, yet the pace is becoming more challenging to sustain.

    • Australia is no longer a single legal market, but three distinct ones 鈥� The report identifies three clearly differentiated law firm segments: Large firms leading demand growth through aggressive investment; Big 8 firms emphasizing pricing power and cost discipline; and Midsize firms pursuing steadier, more moderate growth.

    • Early signals suggest GenAI is reshaping productivity and leverage 鈥� Changes in hours worked across seniority levels point to possible early impacts of GenAI; and while overall productivity is stable, non鈥慹quity partners and associates are logging fewer hours, while senior associates and equity partners are working more.

The Australian legal market enters the back half of FY 2026 with strong topline numbers, but beneath the surface, the market is working harder to maintain its momentum. Firms are navigating slower rate growth, shifting demand patterns, and the early tremors of what may prove to be a generative AI-driven transformation.

Solid footing, harder-won gains

Australian law firms built an impressive track record over the post-pandemic era, and the first half of FY 2026 shows that run may not be over yet 鈥� although its character is changing. Demand growth of 4.8% year-to-date sits a full percentage point above the average quarterly pace since FY 2022, according to the 成人VR视频 Institute’s just-released 2026 Australia: Midyear Legal Market Update report. Worked rates, meanwhile, rose 4.7%, which is respectable, but a noticeable step down from the 5.4% average growth firms had enjoyed since FY 2022.

At the practice level, the picture is broadly encouraging. Both transactional and counter-cyclical practice groups are accelerating, with workplace relations leading all practices at 9.9% year-to-date growth and corporate general close behind at 7.7%. However, a potential warning sign lies in the divergence among each macro-category’s flagship practice: insolvency & restructuring is surging at 7.9%, while mergers & acquisitions sits in contraction at -2.1%. If dealmaking remains subdued while restructuring activity accelerates, transactional practices could face meaningful headwinds in the quarters ahead.

Three markets, not one

Perhaps the most significant finding in this year’s report is what the market-wide averages have been concealing. Last year’s Australia State of the Legal Market report highlighted growing competition between the Big 8 and a broader group of Large law firms that were challenging the Big 8鈥檚 dominance. This year, a refined three-segment framework reveals that the former Large category was actually masking two very different stories, between Large firms and a newly identified set of Midsize firms.

The newly delineated Large firms have emerged as the clear demand leaders, posting nearly 7% year-to-date growth 鈥� roughly double their peers 鈥� fueled by aggressive investment and expansion. The Big 8, by contrast, are leaning into pricing power and cost discipline, growing demand at a more measured 2.7%. And the Midsize cohort, at 2.4% demand growth, is charting a balanced, moderate course.

The profitability divergence is even more striking. Since FY 2022, the firms now classified as Large have grown profits per lawyer by 27.4%, while Midsize firms managed just 3.1% 鈥� much closer to the Big 8’s 7.1% than to their former stablemates. What previously appeared to be a broad-based challenge to the elite was, in reality, concentrated among a smaller group of high performers that were pulling the average upward.

Early signals of AI-driven change

The report also surfaces a potentially significant development in law firm productivity. While overall hours worked per month ticked up slightly for the average qualified fee earner, the gains are unevenly distributed. Non-equity partners recorded their third consecutive productivity decline, and junior and mid-level associates are also slightly down. Yet senior associates and equity partners are logging more hours, keeping overall numbers stable. One possible explanation is GenAI 鈥� if firms are deploying these tools most heavily on research, drafting, and document review tasks that traditionally filled junior and mid-level associate hours, this is precisely the pattern we would expect to see. While it’s too early to draw solid conclusions, the distribution of hours may represent an early sign of how AI is beginning to reshape the traditional leverage model.

There is also a note of caution from firms鈥� clients. 成人VR视频 Market Insights data shows Australian general counsel growing more conservative in their spending outlook, with net spend anticipation for overall legal work dropping to 0 points. That means just as many GCs see their legal spend increasing as those that anticipating it decreasing.

Interestingly, international legal spend tells a different story 鈥� Australia-based GCs are increasingly looking outward, with the Asia-Pacific and Latin American regions emerging as areas of particular activity, while Europe has cooled. For Australian firms with cross-border ambitions, the short-term opportunity may lie to the global east and south rather than west.

Looking into the second half of the year

As the Australian legal market moves into the second half of FY 2026, the story is no longer one of uniform prosperity but rather, one of strategic differentiation. Demand remains healthy, profitability is solid, and expense discipline is improving; however, growth is no longer evenly distributed. The law firms that thrive in the quarters ahead will be those that understand which game they’re playing. In an increasingly segmented market, adaptability 鈥� not scale alone 鈥� will define success.

You can download a full copy of the 成人VR视频 Institute’s 鈥�2026 Australia: Midyear Legal Market Update鈥� report by filling out the form below:

Key findings:

• • • AI adoption accelerates across professional services聽鈥� Organization-wide use of AI in professional services almost doubled to 40% in 2026, with most individual professionals now using GenAI tools, and many preparing for the next wave of tools such as agentic AI.

    • Strategic integration and measurement lag behind usage 鈥� While AI use is widespread, only 18% of respondents say their organization tracks ROI of AI tools, and even fewer measure AI’s impact on broader business goals such as client satisfaction or revenue generation.

    • Communication around AI use remains inconsistent聽鈥� While most corporate departments want their outside firms to use AI on client matters, less than one-third are aware whether their firms are doing so. Meanwhile, firms report receiving conflicting instructions from clients about AI use, highlighting a need for clearer dialogue and shared strategy around AI adoption.

Over the past several years, AI usage within professional services industries has come into focus. As we enter 2026 in earnest, the early adoption phase of generative AI (GenAI) has come and gone. Today, most professionals have experimented with some form of GenAI, and many organizations integrated GenAI into their workflows 鈥� and now, a number are preparing for the next wave of technological innovation such as agentic AI.

Given this, the question for professionals and organizational leaders has now become: What will be AI鈥檚 long-term impact on my business?

Jump to 鈫�

2026 AI in Professional Services Report

To delve into this question further, the 成人VR视频 Institute has released its 2026 AI in Professional Services Report, which takes a broad view into the current usage and planning, sentiment towards, and business impact of AI for legal, tax & accounting, corporate functions, and government agencies. Taken from a survey of more than 1,500 respondents across 27 different countries, the report finds a professional services world that has embraced AI鈥檚 use but is continuing to evolve business strategy around its implementation.

For instance, the report shows that to 40% in 2026, compared to 22% in 2025 鈥� and for the first time, a majority of individual professionals reported using publicly-available tools such as ChatGPT. Additionally, a majority of respondents said they feel either excited or hopeful for GenAI鈥檚 prospects in their respective industries, and about two-thirds said they felt GenAI should be applied to their work in some manner.

At the same time, however, many are exploring GenAI tools without much guidance as to how that use will be quantified or measured. Only 18% of respondents said they knew their organization was tracking return-on-investment (ROI) of AI tools in some manner, roughly the same proportion as last year. And even among those tracking AI metrics, most are tracking mainly internally-focused, operational metrics; and only a small proportion analyzed AI鈥檚 impact on their organization鈥檚 larger business goals 鈥� such as client satisfaction, external revenue generation, and new business won.

This slow move to strategic thinking also impacts client-firm relationships. Although more than half of both corporate legal departments and corporate tax departments want their outside firms to use AI on client matters, less than one-third said they were aware whether their firms were doing so or not. From the firm standpoint, meanwhile, confusion reigns: 40% of firm respondents said they have received orders both to use AI on matters and not to use AI on matters from various clients.

Indeed, bout three-quarters of corporate respondents and firm respondents agreed that firms should be taking the lead in starting these conversations around proper AI use. Yet these discussions have not yet happened en masse. 鈥淔irms are reluctant 鈥� they claim it would compromise quality and fidelity,鈥� said one U.S.-based corporate chief legal officer. 鈥淚 think they are threatened by it.鈥�

All the while, technological innovation progresses ever quicker. This year鈥檚 version of the report measures agentic AI use for the first time, finding that already 15% of organizations have adopted some type of agentic AI tool. Perhaps more interesting, however, is that an additional 53% report their organizations are either actively planning for agentic AI tools or are considering whether to use them, indicating perhaps an even more rapid pace of adoption than we鈥檝e already seen with the speedy rise of GenAI.

Overall, the report makes it clear that most professionals do understand that change, driven by AI in the workplace, is undoubtedly here. Even compared with 2025, a higher proportion of professionals said they believe that AI will have a major impact on jobs, billing and revenue, and even the need for legal or tax & accounting professionals as a whole. The percentage of lawyers calling AI a major threat to the unauthorized practice of law rose to 50% in 2026 from 36% in 2025.

Further, this report paints the picture of a professional services world that has embraced AI, begun to see its impact, and realized that it will have broader business and industry implications than previously imagined. As a result, the time for professionals and organizations to begin planning in earnest for an AI future has already arrived.

As a corporate general counsel from Sweden noted: 鈥淲e cannot keep up with the modern-day corporations鈥� demands unless we also develop and adapt our way of working.鈥�

You can download

a full copy of the 成人VR视频 Institute’s 2026 AI in Professional Services Report听丑别谤别

Key insights:

• • • AI usage in courts needs verifiable reliability鈥� Unlike other fields, errors and hallucinations caused by AI in a court setting can create due-process issues.

    • Skepticism is professional responsibility鈥� Judges’ interrogation of AI sources and accountability concerns are vital guardrails to minimizing these problems.

    • Governance over perfection鈥� Courts and legal professionals should focus on systematic management of AI hallucinations through clear protocols, human oversight, and mandatory verification to ensure veracity.

AI hallucinations have become one of the most urgent and most misunderstood issues in professional work today; and as generative AI (GenAI) moves from and interesting experiment to common usage in many workplace infrastructures, these issues can cause significant problems, especially for courts and the professionals and individuals that use them.

Jump to 鈫�

Responsible AI use for courts: Minimizing and managing hallucinations and ensuring veracity

Today, AI can be used in everything from assisted research to guided drafting of documents, court briefs, and even court orders. With the development of tools supported by GenAI and agentic AI, the very infrastructure of professional work has shifted to include these offerings.

Yet, in most business settings, a wrong answer is an inconvenience. It requires minor corrections and has minimal impact. In the justice system, a wrong answer can be a due-process problem that strongly underscores the need for courts and legal professionals to ensure that their AI use is verifiably reliable when it counts.

At the same time, the direction of travel is clear: AI adoption isn’t a fad we can simply wait out, and it isn’t inherently at odds with high-stakes decision-making. Used well, these tools can reduce administrative burden, speed up access to relevant information, and help court professionals navigate large volumes of material more efficiently. The real question is not whether courts will encounter AI in their workflows, but how they will define responsible use, especially in moments in which accuracy isn’t a feature, it’s the foundation.

鈥淲hether you are a judge [or] an attorney, credibility is everything, particularly when you come before the court.鈥�

鈥� Justice Tanya R. Kennedy Associate Justice of the Appellate Division, First Judicial Department of New York

To examine these issues more deeply, the 成人VR视频 Institute has published a new report,聽, which frames hallucinations not as a sensationalistic gotcha, but as a practical risk that must be managed with policy, process, and professional judgment. The report also features valuable insight on this subject from judges and court stakeholders who today are evaluating AI in the real operating environment of legal proceedings, courtroom expectations, and the daily administration of justice.

This perspective is essential. Technical teams can explain how models generate language and why they sometimes produce confident-sounding errors. However, judges and court staff can explain something equally important 鈥� what accuracy actually means in practice. In courts, accuracy isn’t just about getting the gist right; rather, it’s about precise citations, faithful characterization of the record, correct procedural posture, and language that withstands scrutiny. As the report points out, relied-upon hallucinated information isn鈥檛 merely bad output, it can lead to a potential distortion of justice.

Managing AI as professional responsibility

Crucially, the report reflects that judicial skepticism about AI is not simple technophobia 鈥� it’s professional responsibility. Judges are trained to interrogate sources, weigh credibility, and understand the downstream consequences of errors. Judges may ask, What is the provenance of this information? Can I reproduce it independently? And who is accountable if it’s wrong? These questions aren’t barriers to innovation; indeed, they are the guardrails that this innovation requires.

What emerges is a pragmatic middle ground that embraces the upside of AI use in courts while treating hallucinations as a predictable occurrence that can be managed systematically. Rather than concluding AI hallucinates, therefore AI can’t be used, the more workable conclusion is AI can hallucinate, therefore AI outputs must be designed, handled, and verified accordingly, likely with other advanced tech tools. As the report points out, courts don’t need a perfect AI; rather, they need repeatable protocols that keep human decision-makers in control and keep the record clean.

As the report ultimately demonstrates, managing hallucinations in courts isn’t about chasing perfection, it’s about protecting veracity. It’s about using the right advanced tech tools to build workflows in which the technology consistently supports the truth-finding process instead of quietly eroding it. And it’s about recognizing that in the legal system, responsibility doesn’t disappear when a new tool arrives 鈥� it becomes even more important to ensure the new tool doesn鈥檛 erode that either.

You can download

a full copy of the 成人VR视频 Institute’s 听丑别谤别

Jump to 鈫�

2026 Report on the State of the US Legal Market

As the data underpinning the just-released 2026 Report on the State of the US Legal Market 鈥� published jointly by the 成人VR视频 Institute and the Center on Ethics and the Legal Profession at Georgetown Law 鈥� makes clear, the industry is experiencing its own tectonic moment. Fundamental forces such as shifting client power, economic instability, and technological disruption are pushing some firms to extraordinary heights while leaving others on increasingly unstable ground.

This year’s report examines how the legal market’s current elevation came to be, why it may not last, and what firms can do now to prepare for the inevitable shift.

Key findings in the report

Some of the key findings discussed in this year鈥檚 report include:

• • • Unprecedented demand surge amid market redistribution 鈥� The US legal market experienced some of the strongest demand growth in more than a decade, driven in part by regulatory shifts and geoeconomic instability. Critically, smaller firms captured the lion’s share of growth as clients moved demand from the most expensive firms to lower-cost alternatives.
    • Intense expense growth 鈥� Technology spending and talent costs are rising rapidly, with firms aggressively investing in AI capabilities while simultaneously expanding headcount. This dual arms race is sustainable only so long as demand and rate growth can be maintained as well.
    • Structural business model conflict 鈥� The industry remains trapped between transformative technology and outdated billing structures. Despite heavy AI investments that will fundamentally alter how legal work is performed, 90% of legal dollars still flow through hourly billing arrangements that may no longer reflect the value delivered.
    • Deteriorating buyer sentiment 鈥� Many corporate general counsels (GCs) are signaling that they are considering significant spending pullbacks ahead, with Net Spend Anticipation dropping to levels not seen since the pandemic. Financial forecasts increasingly point to contraction by mid-2026.
    • Historical warning patterns 鈥� Today’s legal market dynamics (represented by booming demand amid instability, runaway expenses, and universal optimism) closely mirror the conditions that preceded previous industry downturns in 2007 and 2021.

As the report makes clear, the challenges ahead are significant. The same forces creating today’s peaks are simultaneously undermining the ground beneath them. The surge in demand stems not from economic health but from chaos 鈥� trade wars, regulatory upheaval, and geopolitical tensions 鈥� all while GCs face stagnant budgets and intensifying pressure to demonstrate value.

While much of this is outside firms’ control, however, their response to it is not. The report clearly shows that those firms that use the current boom to reinforce their footing by modernizing pricing models, strengthening client relationships, and deploying technology in ways that deliver measurable value rather than marketing gloss will be best positioned for what comes next.

As this year’s report illustrates, 2025 was less a summit than an inflection point. The firms that treat elevation as permanence may find, as countless mountain ranges have over geologic time, that height is not a promise 鈥� it’s a phase.

You can download

a full copy of “2026 Report on the State of the US Legal Market,” published jointly by the 成人VR视频 Institute and the Center on Ethics and the Legal Profession at Georgetown Law, by filling out the form below:

Key insights:

• • • Compliance is becoming a technology arms race鈥� Criminals are rapidly deploying AI, automation, and cryptocurrency to execute sophisticated fraud on a large scale, while many compliance departments remain stuck with legacy systems, creating a technological gap.

    • AI represents a dual-edged sword for compliance 鈥� Organizations must strategically determine appropriate AI applications while maintaining rigorous human oversight and validation protocols.

    • Regulatory fragmentation is creating operational complexity 鈥� The compliance environment is splintering, and this fragmentation demands creating near-real-time automated systems and abandoning manual compliance processes.

The world of compliance and risk management is evolving quickly. Criminals, regulators, and markets are all moving faster, often powered by AI and digital innovation. As a result, compliance can no longer function as a static control department; rather, it must become an intelligent, tech-enabled risk partner to the business.

To examine this evolving terrain more deeply, the 成人VR视频 Institute has published a new digital report, 10 Global Compliance Concerns for 2026, that draws on interviews with compliance and other area experts to map out the critical challenges ahead and help determine what organizations need to do now to prepare.

10 critical risk areas

Based on extensive interviews with these experts, the report identifies 10 areas in which today鈥檚 compliance leaders should expect heightened scrutiny in 2026. These areas span tech-enabled fraud and scams, ethical AI use, crypto-assets entering mainstream finance, expanding data privacy obligations, and the professionalization of cybercrime.

Jump to 鈫�

10 Global Compliance Concerns for 2026

The experts we interviewed also highlight shifting financial crime enforcement priorities, escalating sanctions and tariff risks, complex reporting requirements around ESG issues, third-party oversight challenges, and accelerating regulatory changes across AI, cybersecurity, climate, and digital assets.

Across all 10 areas, the specialists interviewed stress that organizations will need stronger governance, smarter technology, and better-trained people in order to keep pace.

Interestingly, several developments stand out as game-changers in the report. For example, fraud seems to be entering a new era, one in which criminals aggressively adopt AI, automation, and crypto to scale up attacks while many compliance teams still rely on outdated tools. Smaller financial institutions, fintechs, and digital platforms are particularly vulnerable without advanced monitoring and analytics capabilities, area experts explain.

鈥淎I is a force multiplier for criminals, and they are exploiting that technology however they can,鈥� says Urriolagoitia 鈥淩io鈥� Miner, the founder and CEO of , adding that 鈥渂anks and financial institutions tend to move slowly, but hopefully they will start incorporating more AI tools as well to fight back.鈥�

The risks and opportunities of AI

AI itself presents both opportunity and risk on the compliance landscape. The experts interviewed urge organizations to think strategically about in which areas AI can enhance investigations, monitoring, and due diligence, and where it introduces unacceptable ethical or privacy concerns. Human oversight and robust validation remain essential.

Another potential development is that crypto is now mainstream, creating urgent demands on compliance officers to understand digital assets, stablecoins, and emerging regulatory frameworks. Experts emphasize that applying traditional risk-based approaches becomes far more complex when teams lack familiarity with blockchain activity and crypto-enabled crime patterns. Further, data privacy and cybersecurity stakes are rising as regulators grow increasingly intolerant of weak controls. Yet, technology is only half the solution, the area experts consulted note, and cultural factors and ongoing training are equally critical.

鈥淎I technology presents tremendous opportunities for improving efficiency and reducing costs within compliance programs,鈥� says Teresa Anaya, founder and director of AML Audit Advisory.聽 However, she adds, 鈥淎I adoption must be approached thoughtfully and responsibly, and be conducted with expert human oversight.鈥�

Finally, regulatory change itself is a structural risk. The volume, speed, and complexity of new requirements are outpacing many compliance teams鈥� manual processes. Organizations need to invest in scalable technology and automation so that their compliance teams can simply keep up, experts warn.

Priorities for action

The report concludes with practical priorities drawn from these expert insights. for example, organizations should refresh enterprise-wide compliance risk assessments and strengthen governance and accountability, especially around AI and vendors. And as mentioned, investing in modern compliance and automation technologies is critical, as is updating policies for emerging risk domains.

For boards, executives, and compliance leaders, the expert consensus is clear: 2026 will reward those organizations that treat compliance as a forward-looking strategic capability that is fully integrated with technology, risk, and business decision-making.

You can access

a full copy of the 成人VR视频 Institute鈥檚 new digital report, 10 Global Compliance Concerns for 2026, here