Small law firms want to grow but not at any cost – LexisNexis
The latest findings from our LexisNexis survey found small law firms are slightly more open to the prospect of a merger or acquisition with another firm, although the majority are still taking a slow, strategic approach to growth.
The Bellwether Report 2026 Lean, focused, profitable found 67% of firms are planning to expand their business through organic means, a slight dip from last year’s high of 72%, but still the clear majority.
The report did find attitudes towards mergers and acquisitions is up from last year’s low of 5%, now at 8%. This rose to 12% for personal injury and 10% for commercial and corporate.
When asked about the biggest concerns they would have in an M&A, the top concern was cultural fit (48%) rather than financial risk (43%).
Growth is firmly on the agenda, but not all growth looks equally attractive. For many firms, the priority is not simply to get bigger. It is to become leaner, more focused and more profitable without adding unnecessary complexity.
Growth is becoming more disciplined
For small and mid-sized firms, organic growth remains the preferred route because it allows firms to build on existing client relationships, strengthen their reputation, improve internal processes and expand at a pace they can manage.
Growth is not just about taking on more work anymore, says Sophia Ramzan, Partner & Head of Residential Conveyancing at Watkins Solicitors.
“It’s more about doing things properly and building trust so clients come back and refer others.”
This raises a good point. A firm can grow revenue and still weaken its business if the work is poorly scoped, inefficiently delivered or insufficiently profitable.
M&A is back in the conversation, but culture remains the concern
The rise in M&A appetite suggests some firms are reconsidering consolidation as a route to growth.
That may be unsurprising. A merger or acquisition can help firms enter new markets, deepen specialist capability, acquire talent or build scale more quickly than organic expansion allows.
But the report also shows why firms remain cautious.
When asked about their biggest concerns in a merger or acquisition, cultural fit came out on top at 48%, ahead of financial risk at 43%.
That says a great deal about how small law firms see growth. The decision to merge with another firm could have a positive or negative impact on the people, clients and the overall service provided.
Firm identity is crucial to client engagement, believes Zoë Bloom, Partner at AFP Bloom.
“A cookie cutter law firm, replicating the others around it, will find it harder to grow than a firm which is confident in its own identity. Firms that try to replicate others tend to lose clarity and direction.”
Clients are changing the growth equation
The growth challenge is being shaped by changing client expectations as much as by internal ambition. Clients increasingly expect efficiency, transparency, responsiveness and value from their legal advisers, driven in large part by advances in technology and AI. As Kate Bennett, Founding Partner of Arbor Law, puts it, clients are buying “judgement, commercial alignment, speed and demonstrable outcomes.” That has obvious implications for how firms think about expansion. Adding more work only helps if the firm can deliver that work profitably, consistently and in a way that strengthens the client relationship.
Operational drag is still holding firms back
The report suggests this is where pressure is building. Many firms are confident in the quality of their client service, but the operational foundations are less secure. Administrative tasks were the biggest workflow issue, cited by 52% of respondents, followed by case management at 41% and document drafting and reviewing at 28%. For firms looking to grow organically, those figures matter. Growth can quickly become harder to manage if too much time is still being absorbed by back-office processes, matter handling and routine document work.
Technology is becoming part of the growth strategy
That is why the growth story is increasingly tied to process improvement. Firms expressed strong interest in using AI for research, drafting and review, cited by 41% of respondents, while 40% pointed to standardising documents and workflows. The biggest shift is likely to come where technology and standardisation reduce effort, improve consistency and support profitability. For small and mid-sized firms, this is less about chasing innovation for its own sake and more about creating the capacity to grow without adding unnecessary cost or complexity.
The winners will grow with focus
Taken together, the findings suggest firms are becoming more selective and deliberate about where growth comes from. Organic expansion remains the dominant strategy, while M&A is becoming slightly more attractive but still sits behind concerns about culture, integration and financial risk. For some firms, a merger or acquisition may be the right move. For many others, the more immediate opportunity is to make the existing business sharper, leaner and more profitable.
Small law firms have entered 2026 with confidence, but not complacency. They know their strengths: strong client relationships, quality service and deep expertise. They also know where pressure is building: profit margins, capacity, pricing and the day-to-day inefficiencies that make growth harder to sustain. The winners will be those that can grow with focus, protect what already makes them valuable to clients, and use technology and better processes to turn ambition into sustainable performance.
Read the survey here.
