Demand for legal services keeps growing. What changes is where that demand comes from, which firms capture it, and which attorneys are positioned to benefit.
When we first wrote about emerging practice trends in 2021, the conversation centered on social media, early cryptocurrency offerings, and state-by-state cannabis legalization. Five years later, several of those trends have matured into major practice areas. Others have been reshaped by federal action. And one development that barely registered then, artificial intelligence, now touches nearly every corner of the profession.
The question for partners and senior attorneys hasn’t changed. Are you ready for these shifts, and how will they affect the way you practice?
The Legal Market Is Growing, but Not Evenly
By most measures, 2025 was an exceptional year. The 2026 Report on the State of the US Legal Market, published by the Thomson Reuters Institute and Georgetown Law’s Center on Ethics and the Legal Profession, found that demand posted its best year of growth since the global financial crisis and the average firm grew profits by 13 percent.
The report also carried a warning. It attributes much of that demand to trade wars, regulatory upheaval, and geopolitical tension rather than underlying economic strength, and it forecasts demand softening in 2026.
More important for career strategy is where the work went. In the second half of 2025, midsize firms grew demand by nearly 5 percent while the Am Law 100 stayed below 2 percent, as clients moved work away from the most expensive firms toward lower-cost alternatives.
That shift matters for every partner evaluating their platform. Rate structure, conflicts, and cost to clients can now determine whether a practice grows or stalls. Partners at high-rate firms who serve price-sensitive clients may be the first to feel the pressure.
Mergers and Acquisitions: Bigger Deals, Fewer of Them
In 2021 we predicted continued growth in M&A. That held up, though the market looks different than many expected. According to LSEG data, global M&A reached a record $2.85 trillion in the first half of 2026, up 50 percent from the prior year, even as the number of transactions fell 9 percent. Deals involving U.S. targets accounted for $1.5 trillion of that activity, or 54 percent of the global total.
Mega-deals are driving the market. LSEG counted 48 transactions of $10 billion or more in the first half, worth a combined $1.3 trillion, and technology led all sectors with roughly a quarter of deal value.
For transactional attorneys, concentration cuts both ways. Mega-deals require deep benches in antitrust, tax, financing, employee benefits, and regulatory approvals, which favors platforms with that breadth. Middle-market dealmakers face a smaller pool of transactions and more competition for each one. In either segment, partners with durable institutional client relationships remain among the most marketable attorneys in the profession.
Artificial Intelligence: The Trend That Touches Every Practice
No development has moved faster. The Thomson Reuters 2026 AI in Professional Services Report found that 41 percent of law firms and 47 percent of corporate legal departments now use generative AI, up from 28 percent and 23 percent a year earlier. Firms are also spending heavily on it. The State of the Legal Market report found technology investment grew nearly 11 percent in 2025.
Clients are paying attention. The same AI report found that 41 percent of firms have received direct client input on whether to use AI in their matters, and 77 percent of respondents believe the law firm, not the client, should start that conversation.
Governance is still catching up. Fewer than 20 percent of lawyers say their organizations measure the return on their AI investment. On the ethics side, ABA Formal Opinion 512 set out how existing duties of competence, confidentiality, client communication, and reasonable fees apply to generative AI tools.
AI also creates legal work. Clients need counsel on AI governance, intellectual property, automated decision-making in employment, product liability, and data use. Attorneys who build credibility in these areas now are positioning themselves in a practice that barely existed five years ago.
Data Privacy and Cybersecurity: A Patchwork That Keeps Growing
In 2021, we noted that states were strengthening privacy statutes and that breaches had become the new normal. Both trends accelerated. According to the IAPP, 23 states have now enacted comprehensive consumer privacy laws, four of them in 2026 alone, alongside dozens of sectoral laws covering artificial intelligence, biometrics, consumer health data, data brokers, and youth privacy.
With no federal privacy law to unify these rules, multi-state businesses face overlapping and sometimes conflicting obligations. The result is sustained demand across compliance counseling, incident response, regulatory defense, and data breach litigation. Attorneys who can help clients manage the full patchwork, rather than one statute at a time, are in a strong position.
Digital Assets: The Market Stayed, the Rules Didn’t Arrive
Our original article asked whether the wave of cryptocurrency offerings was a flash in the pan. The market didn’t disappear. The open question now is regulation.
Congress enacted a federal stablecoin framework, the GENIUS Act, in July 2025. The broader market structure bill has had a harder road. The Digital Asset Market Clarity Act passed the House in 2025, and the Senate Banking Committee reported its version on June 1, 2026. On September 15, 2026, the Senate failed to invoke cloture to begin debate. A motion to reconsider keeps the bill technically alive.
As NPR reported, the legislation would have created the first comprehensive regulatory framework for the crypto sector and split oversight between the SEC and the CFTC. Without it, the industry continues to operate under agency guidance and enforcement priorities that can shift with each administration. That uncertainty sustains demand for regulatory counsel, enforcement defense, banking and fintech advice, and litigation.
Cannabis: Partial Rescheduling, Continued Complexity
The state-by-state legalization we described in 2021 has since drawn a significant federal response. In April 2026, a final rule moved certain FDA-approved marijuana products from Schedule I to Schedule III of the Controlled Substances Act. Broader federal marijuana rescheduling remained unresolved.
The change is significant for the products covered by the final rule, but the broader question is still pending. The DEA held an 11-day evidentiary hearing in June and July 2026 on whether marijuana should be rescheduled more broadly, and the government asked the administrative law judge to recommend that it should.
The result is continued complexity for cannabis businesses and the ancillary companies that serve them. These clients continue to need counsel on federal and state compliance, banking, licensing, capital raising, transactions, and related regulatory issues.
Trusts and Estates: Certainty on the Exemption, Complexity Everywhere Else
For several years, estate planners worked under the threat of a scheduled drop in the federal exemption. That uncertainty is gone. Under the One Big Beautiful Bill Act, the federal estate and gift tax exemption rose to $15 million per individual for 2026, up from $13.99 million in 2025. It is indexed for inflation and has no sunset provision.
That doesn’t mean the work disappears. It changes. Residents of the 18 states and jurisdictions that impose an estate or inheritance tax still need planning even if they fall under the federal threshold. Family business succession, blended families, and digital assets held in estates all add complexity. The rising cost of healthcare and long-term care continues to shape how families structure trusts and plan for the future, just as it did in 2021.
“Permanent” in tax law means no scheduled expiration, not a guarantee. Future Congresses can change the rules, and clients will expect their counsel to stay ahead of any shift.
Social Media and Business Development: From Optional to Expected
In 2021, social media was a growing tool for lawyers. Today it’s an expected part of professional reputation. According to the ABA’s 2022 Websites and Marketing TechReport, 87 percent of firms with a social media presence use LinkedIn, and 23 percent of lawyers who use social media reported that a client retained them as a result.
The landscape has shifted again since then. Clients and general counsel increasingly research attorneys online, making a strong digital presence and substantive thought leadership more important to professional visibility. A thin profile and an outdated bio are a missed opportunity.
Let’s be clear, though. Nothing beats, or will ever replace, face-to-face relationships. Digital visibility extends your reach to the right prospects and reinforces what you’re known for. It works best when it amplifies relationships you’re already building in person.
What These Trends Mean for Your Career
Every trend above raises the same strategic questions for senior attorneys. Is your practice positioned in an area of growing demand, or in one that is flattening? Does your platform support that growth with the right rate structure, conflict profile, technology, and complementary practices? Are clients and referral sources aware of what you do?
The attorneys who benefit most from market shifts tend to act early. They build expertise before a practice area becomes crowded, they choose platforms that fit where their practice is headed rather than where it has been, and they make strategic moves from a position of strength rather than necessity.
For firm leadership, the same trends shape growth strategy, from which lateral partners to recruit to which practice groups to invest in. For senior partners thinking about the next chapter, they also affect succession, because a practice aligned with growing demand is far easier to transition. For more on that topic, read Confessions of a Legal Recruiter: When Do You Plan to Leave?
Frequently Asked Questions
Which legal practice areas are seeing the most demand in 2026?
Regulatory work is a major driver, reflecting ongoing policy changes, trade disputes, and geopolitical uncertainty. M&A activity reached record value in the first half of 2026. Data privacy, AI governance, digital asset regulation, and cannabis all continue to generate demand because the rules governing them are still evolving.
How is AI changing demand for legal services?
AI is changing both how legal work is delivered and what clients need. Firms are adopting generative AI tools rapidly, and clients increasingly expect to discuss how those tools are used on their matters. At the same time, AI is creating new advisory work in governance, intellectual property, employment, privacy, and liability.
Why are midsize firms gaining market share?
According to Thomson Reuters Institute data, clients moved demand away from the highest-cost firms toward lower-cost alternatives in 2025. Midsize firms grew demand nearly 5 percent in the second half of the year, while the Am Law 100 stayed below 2 percent.
How should a partner evaluate whether their platform fits these trends?
Look at rate structure relative to your clients’ budgets, conflicts that limit your ability to take on new work, the strength of complementary practice groups, and the firm’s investment in technology. A confidential conversation with an experienced advisor can help you benchmark your platform against the market.
Do attorneys still need to network in person?
Yes. Digital visibility extends your reach, but face-to-face relationships remain the foundation of business development. The most effective attorneys combine both.
Where Do You See Opportunity?
Five years ago, we closed this article with a few questions. They’re even more relevant now. How will these new areas of law affect your practice? Where do you see opportunity? What are your concerns?
If these market shifts are raising questions about where your practice fits, now is the time to talk them through.
If changes in the legal market are making you question whether your practice, platform, or growth strategy is positioned for what comes next, On Balance Search Consultants can help you evaluate your options.
For a deeper look at the decisions that shape an attorney’s career, request a complimentary copy of The Arc of an Attorney’s Career. DM CLARITY on LinkedIn or email Shari@OnBalanceSearch.com.
Who’s Driving Your Career?™
Shari@OnBalanceSearch.com | OnBalanceSearch.com | 516-731-3400
All conversations are confidential.
About On Balance Search Consultants
On Balance Search Consultants provides market intelligence and strategic advisory services to law firms and experienced attorneys. Shari Davidson, President, advises on lateral partner transitions, law firm growth, leadership succession, and attorney career strategy. Working with both firms and attorneys, On Balance helps align long-term objectives with the right platform, leadership structure, and growth strategy.
Contact: OnBalanceSearch.com | 516-731-3400
Disclaimer: This content is provided for informational and educational purposes only and does not constitute legal advice. Readers should consult qualified legal counsel regarding their specific circumstances and applicable legal requirements.
Sources
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