Law.com: Expense Acceleration Is the Defining Risk Heading Into H2 2026

Law.com's August 10 analysis, drawing on a broader survey of large law firms alongside the LFFI data, frames the H2 risk environment clearly: through H1, most large law firms reported meeting or exceeding profitability expectations, and nearly all expect solid revenue growth through year-end. The risk is on the cost side. Firms have committed to AI infrastructure buildout, headcount at senior leverage levels, new office space, and Milbank-scale compensation — all of which have locked in an expense trajectory that requires sustained demand and rate growth to generate net profit expansion rather than compression. For law firm leadership and CFOs, the question is not whether 2026 will be a good year (it will) but whether the expense commitments being made now are sized for a 2027 environment in which demand normalizes back toward the 1.5%–2% historical average.