The legal sector continued to demonstrate resilience throughout 2025, despite persistent macroeconomic headwinds in the UK and around the world. Firms are pressing ahead with investment in systems, offices and global infrastructure as they look to optimise their competitive advantage for the future, or at the very least, remain competitive.

As a result, many law firms are facing a difficult dilemma - how to balance increasing cash pressures and wider market uncertainty with the need to fund essential future focused capabilities. These dynamics underscore the critical importance of strong cash management, disciplined capex planning and forecasting, and embedding cash considerations as a core principle in both strategic and operational decision making.

At the same time, external facilities are being used more routinely to fund investment, rather than as a tool for managing short‑term cash pressures. Many firms have also undertaken capital calls, or plan to do so over the next year, to fund tax changes and larger‑scale investment programmes. Despite some recent improvements, lock‑up remains an under‑utilised source of low-cost finance. While it remains a key topic of focus for most firms, translating discussion into sustained behavioural and operational change remains challenging.

What’s included in this report:

1. Cash pressures are intensifying across the sector, driven by significant investment requirements in technology and offices as well as the ongoing impact of Basis Period Reform
2. Firms are becoming increasingly reliant on external funding to support larger-scale investment and manage increasing cash demands
3. Partner capital levels have risen materially over the last year, with many firms undertaking or planning capital calls to strengthen funding for future investment
4. Improvements in lock-up performance are beginning to emerge, though substantial levels of cash remain tied up across the sector
   
   

Download the report for more information.

Download the report for more information

If you would like to compare these new findings with the previous edition of our Law Firm Capital Benchmark, please let us know and we will be happy to share this with you.

If you would like to discuss any of the content in this report or are a professional services business looking to speak to an expert, please contact Richard Dammermann or your usual BDO contact.

Download report