Q2 LFFI Productivity Warning: Mid-Sized Firms Falling Behind While AmLaw 100 Accelerates

The Thomson Reuters Institute's Q2 2026 LFFI (released August 10) delivered a split verdict for mid-sized firms: profit per FTE pulled ahead of revenue per FTE in Q2 — a positive sign of operating leverage — but productivity contracted while AmLaw 100 and Second Hundred productivity both improved. The productivity gap between the two leading segments and mid-sized firms widened markedly in Q2, reaching its most dispersed level since late 2022, when all three segments were contracting. Intellectual property demand contracted at mid-sized firms in Q2, the only practice area in negative territory for that segment, while IP demand grew solidly at Second Hundred firms. For managing partners at mid-sized firms, the LFFI's productivity signal is the most actionable number: large firms are translating AI investment into measurable output gains, and mid-sized firms that are still in procurement or pilot phases are watching the gap widen. The window for catching up through AI deployment is open but narrowing.