Thomson Reuters LFFI shows demand growth, but rate power still defines Am Law economics

Thomson Reuters Institute says Q1 2026 legal demand grew 2.7%, roughly triple the long-run average, while the Law Firm Financial Index landed at 55, exactly its historical average. The segment split matters: Am Law 100 firms produced only 1.2% demand growth but pushed worked-rate growth near 10%, while the Am Law Second Hundred delivered 4.0% demand growth and midsize firms grew 2.6% through specialization and diversified practices. The market is not sending one simple signal. Elite firms are still monetizing rate power, the Second Hundred is building a demand moat, and midsize firms are finding margin logic in specialization rather than trying to out-price or out-volume larger competitors.