9. Thomson Reuters Q1 2026 LFFI: Midsized Firms Growing Worked Rates at Half the Am Law 100 Pace

The Thomson Reuters Q1 2026 Law Firm Financial Index documents an accelerating structural divergence: Am Law 100 firms grew worked rates at 9.8% in Q1 2026; midsized firms grew worked rates at only 5.3% — roughly half the pace and below the market average of 7.0%. Simultaneously, midsized firms recorded direct expense growth of 5.4%, the highest of any segment, and invested the least in technology and knowledge management (6.2% growth, lowest of all segments). Demand growth for midsized firms was 2.6%, essentially at market average but trailing the Am Law Second Hundred's 3.9%. The LFFI frames this as a compounding margin compression cycle: midsized firms are neither underinvesting in client work nor retreating from the market, but they are falling further behind on the economics that will define competitive positioning over the next five years.

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