National audit, tax, advisory and consulting firm Crowe today released the
findings of its 2026 Law Firm Benchmarking Survey, produced in collaboration
with the Institute of Legal Finance & Management (ILFM), revealing that law
firms across Kent and the wider South East are matching City firms on growth
while outperforming them on cash management.
Key findings include:
Revenue growth of 11% to 12% across both City and regional firms
Half of firms exceeded budget expectations
Regional firms improved lock-up performance from 140 to 132 days
People costs remain the biggest pressure on profitability, cited by 75% of firms
More than half (51%) identify profitability and margin improvement as a strategic priority
Nearly eight in ten firms (79%) have committed dedicated funding to AI initiatives
Nicky Owen, Head of Professional Practices at Crowe, said: "This year's
findings highlight the growing strength of regional legal markets such as
Kent. Regional firms are delivering growth on a par with City practices while
making meaningful improvements in working capital management and cash
conversion."
The findings support Owen's comments, with regional firms reporting revenue
growth of 11% to 12%, matching their City counterparts while achieving
significant improvements in lock-up performance and cash conversion. Average
lock-up among regional firms improved from 140 to 132 days, compared with an
increase from 135 to 153 days among City firms.
While growth remains strong, the survey suggests firms are increasingly
focused on turning revenue into sustainable profitability. Owen added: "At a
time when firms are facing rising employment costs, increasing regulation and
ongoing investment in technology, the ability to convert growth into profit
and cash is becoming a key differentiator. Regional firms are demonstrating
that strong financial performance is not confined to London."
Despite ongoing economic uncertainty, half of all firms surveyed exceeded
their budget expectations, underlining the resilience and adaptability of the
legal sector. However, more than half of firms (51%) now cite profitability
and margin improvement as a strategic priority, reflecting a shift in focus
from growth alone towards cash generation, operational efficiency and
sustainable partner returns.
The survey also points to the ways firms are responding to these pressures,
balancing investment in people with technology and innovation.
Ben Carter, Partner, Professional Practices and Private Clients at Crowe,
said: "Kent continues to be a significant legal centre, and the survey
reflects the ambition and resilience we are seeing across the wider sector as
firms continue to grow and invest for the future.
"While three quarters of firms identified rising employment costs as their
biggest challenge to profitability, the survey also highlights a strong
commitment to innovation. Nearly eight in ten firms have committed dedicated
funding to AI initiatives as they look to improve productivity, enhance client
service and support future growth. The results paint a picture of a sector
that is both commercially focused and forward-looking."
Overall, the findings highlight a resilient and forward-looking legal sector,
with firms across Kent and the wider South East demonstrating that strong
growth, financial discipline and investment in innovation can go hand in hand.
To find out more about the survey and its implications for law firms, please
contact Ben Carter at [email protected].
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