The Year Expenses Outran Rates: Why 2026 Is a Cost-Discipline Reckoning for Law Firms

Law firms posted record profits and 7%+ rate growth in 2025 - but direct costs rose 8.5% and overhead 7.5%, outpacing rates while collected realization eroded. The firms that stay profitable in 2026 won't just raise rates; they'll run their operations and software stack with real cost discipline.