Law Firm Costs Just Grew Faster Than They Have Since 2024: Direct Expenses Up 8.3%, Overhead Up 7.7% — and Most Firms Can't Say Which Practice Group Caused It

Thomson Reuters' Q2 2026 Law Firm Financial Index shows direct expenses up 8.3% and overhead up 7.7% — the fastest growth for both since 2024 — while technology and knowledge management spending climbed 11.6%. The revenue story is strong. The cost story is the one most mid-market firms cannot actually explain, because their expenses post to a general ledger that was never mapped to a practice group.