Key takeaways:

• • • New Zealand legal market achieves revenue and profit growth — A new TRI report on the New Zealand law firm market shows firms rebounding strongly from the pandemic, with firm revenue and profits up impressively.

    • Transactional and counter-cyclical practice demand drives success — More than half of the legal demand for New Zealand law firms comes from transactional work, which rose of the past year; meanwhile, counter-cyclical practices saw even higher growth rates.

    • Managed expenses and increased partner utilisation boost profit margins — Despite rising expenses due to technology and knowledge management investments, New Zealand law firms maintained manageable costs and increased equity partner utilisation.

For New Zealand law firms, years of careful investment and strategic pandemic recovery have paid off. Today, strong demand has vaulted firm revenue growth above double digits, leading to profits not seen among New Zealand firms since the early days of the pandemic, according to a new report from the Thomson Reuters Institute (TRI) and data from TRI’s .

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2026 Report on the State of the New Zealand Legal Market

Demand at New Zealand law firms rose more than 5% last year, following stagnant or decreasing growth rates between 2022 and 2024, according to TRI’s 2026 Report on the State of the New Zealand Legal Market. As a result, overall firm revenue rose by more than 10%, placing it back near pre-pandemic levels. Coupled with managed expense growth, New Zealand law firms saw their first double-digit profit growth since 2021, after declines in demand for transactional practice work scuttled profits in 2022 and 2023.

Overall, more than half of the legal demand for New Zealand law firms comes from transactional work such as corporate general and M&A practices; and indeed, demand for such work rose last year after seeing only modest growth or declines in the the years prior. However, the report shows that even more notable is the rise of demand in counter-cyclical practices such as disputes & litigation, insurance defense, and workplace relations. The growth rate of counter-cyclical demand topped that of transactional demand in the second quarter of last year and continued to separate itself throughout the remainder of the year.

At the same time, firms continued to enjoy steady rate growth, with their worked rate growth over this past year coming close to their average rate growth than was seen from 2022 to 2024.

Interestingly, this represents a different strategy by New Zealand firms, compared to those in the United States or Australia, to capture profits through other means while keeping their rate increases manageable. And indeed, while Australian and US firms have largely seen falling utilisation, New Zealand equity partners averaged more hours worked per month in 2025 than they did the year prior, which helped to drive higher revenues.

Meanwhile, total expenses ticked up slightly last year compared with 2024, with both direct expenses and indirect expenses rising. However, much of this growth in indirect expenses is largely due to increased investments in technology and knowledge management, an increasingly necessary expense in the age of AI.

As a result of the demand rebound and more manageable expenses, New Zealand law firms are seeing their revenues and profits soar.

Overall revenue more than doubled, percentagewise, in 2025, which in turn directly led to sky-high profits in 2025 that were almost triple what they were the year prior. Profit per equity partner also saw similar gains.

Overall, New Zealand law firms on average largely held steady with a profit margin around 43%, while some firms saw profit margins soar above 50%.

As the report shows, all of this represents a very positive financial picture for New Zealand law firms. The return of demand, steady rate growth, and managed expenses has provided firms a solid footing from which to grow further. And if New Zealand law firm leaders can build on those positive metrics, they look poised to take these gains and grow further in 2026.

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a full copy of the Thomson Reuters Institute’s “2026 Report on the State of the New Zealand Legal Market” by filling out the form below:

Key takeaways:

• • • Disconnect between legal departments and C-Suite perceptions — While many general counsel believe their departments are significant contributors to business success, most C-Suite executives do not share this view. Fully 86% of GCs say they believe their department is a significant contributor, but only 17% of C-Suite executives agree.

    • A need to find new ways to demonstrate value — Legal departments are under increasing pressure to do more with less, as nearly half of GCs surveyed cite staffing and resource constraints as their top barrier to delivering additional value. Despite these limitations, expectations from the C-Suite continue to rise.

    • AI adoption accelerates, business strategy comes next — Legal departments are rapidly embracing technology to improve efficiency, manage resources, and address cost pressures. Not surprisingly, the proportion of GCs calling AI a strategic imperative has doubled.

Over the past several years, general counsel and corporate law departments at large have transformed their operations. Many have become more efficient enterprises, leveraging technology, in particular AI, at an increased pace. GCs have adjusted their hiring practices to conform with the modern corporation, taking new ways of working into account. And they have embraced data-driven decision-making, evaluating outside counsel and their own operations alike with a wider suite of new metrics and KPIs.

But do you know who hasn’t yet realized the fruits of that labor? The corporate C-Suite.

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2026 State of the Corporate Law Department Report

The , released today by the Thomson Reuters Institute, reveals a disconnect between how GCs and their corporate law departments view their own alignment to the wider business, and what C-Suite executives believe the legal department contributes. Within this gap, the message is clear: GCs not only need to align with their organizations’ overall business strategy, they need to learn how to prove that alignment to the rest of the company.

Indeed, when asked how they view legal’s contribution to the rest of the business, 86% of GCs surveyed said they viewed the legal function as a significant contributor. However, only 17% of other C-Suite executives said the same — and 42% said legal contributes little or not at all.

As the report explains, this disconnect lays the inherent groundwork for the tension facing many GCs today. While they are increasingly aiming to align to business standards, the rest of the organization is not recognizing those actions. Instead, many C-Suites are looking for even more out of today’s legal departments to prove their contributions to organizations’ business imperatives.

As in past years, many in-house legal departments are being tasked to do more with less. Nearly half of GCs cited staffing and resource constraints as the top barrier they face to delivering additional value. Indeed, many said they expected outside counsel spend in some key areas — such as regulatory work and mergers & acquisitions — to remain high. As of the fourth quarter of 2025, more than one-third (36%) of GCs said they expect to increase overall spend on outside counsel over the next year, while only 20% said they plan to decrease their spend.

Despite legal departments’ gains, their C-Suites are looking for them to take the next step, turning operational excellence into business success.

Not surprisingly, many GCs said they view technology as one of the primary ways they have to combat these resourcing and cost issues. In fact, the proportion of GCs mentioning technology as a strategic priority entering 2026 doubled over the year prior. Legal departments have begun to feel positive effects of AI in their own organizations, the report notes, such as increased efficiency or time feed up for strategic work.

Despite these gains, C-Suites are looking for are looking for their legal functions to take the next step, turning operational excellence into business success. This can take a number of different forms, such as explicitly tying advice to client business objectives, presenting legal spend in the context of the business by showing it as a percentage of revenue, or approaching risk management with the goal of aiding business imperatives. “When we have a risky legal subject, the company never prefers just to see the legal opinion,” said one retail GC. “They’re also requesting you to drive them how to make a decision.”

AI and technology should also be approached in this same way, the report argues. Although almost half of all corporate legal departments have some type of enterprise-wide GenAI tool, according to the survey, very few are collecting success metrics around AI’s implementation or linking its use to business revenue. Put a different way, many legal departments are focused on unlocking capacity, rather than deploying capacity in a business-centric way — much to the chagrin of their C-Suites.

Although legal departments have established a solid foundation upon which a business can stand, ultimately, C-Suites don’t want just a foundation. They want help building the entire house, the report shows, directly enabling the services that companies provide to customers. In that, GCs and legal departments have more work to do, not only tying strategy to overall business initiatives but actively communicating how the legal function’s work aids the company as a whole.

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a full copy of the Thomson Reuters Institute’s “” here

Key insights:

• • • Possibilities vs. practicality — There is a growing frustration gap between what corporate tax professionals want to achieve and what their current technological tools will allow.

    • Expectations about AI — Tax professionals have significantly accelerated the timeframe in which they expect AI to become a central part of their workflow.

    • Proactive progress — Automation is enabling a gradual shift toward more strategic, proactive tax work, although not as quickly as many tax professionals would like.

The recently released , from the Thomson Reuters Institute and Tax Executives Institute, reveals that while automation of routine tax functions is indeed enabling a long-desired shift toward more strategic, proactive tax work in some corporate tax departments, a majority of tax leaders surveyed say upgrading their department’s tax technology is still a relatively low priority at their company.

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2026 Corporate Tax Department Technology Report

The report surveyed 170 tax leaders from companies of all sizes to find out how corporate tax professionals are using technology, overcoming obstacles, and planning for the future.

A growing “frustration gap”

In general, the report found that while many companies (especially larger ones) are actively upgrading their tax department’s technological capabilities, there is a growing frustration gap between what tax professionals know they can accomplish with more robust technologies and what their current tools allow them to do.

Adding to this frustration is a growing discrepancy between the additional budget and resources tax departments hope to get each year and the harsher reality they often face. Indeed, even though tax leaders remain optimistic that their budgets and capabilities will expand and improve in the coming years, fewer than half of the respondents surveyed said their departments received a budget increase last year, and many saw budget cuts.

Further, the report shows that the prospect of incorporating ever more sophisticated forms of AI and AI-driven tools into tax workflows is also very much on the minds of tax professionals. Even though the actual usage of AI in corporate tax departments is still relatively low, the report reveals that tax professionals now expect AI become a central part of their workflow within one to two years, much faster than they did in last year’s report.

Indeed, as the report explains, this expectation of more imminent AI adoption represents a significant shift in attitude, because most corporate tax departments are rather circumspect about how, when, and why they incorporate new tech tools into their established routines.

If today’s technological capabilities continue to accelerate, companies that have been slow to invest in the infrastructure necessary to keep pace may soon find themselves struggling to catch up with their more tech-savvy counterparts, the report warns.

Moving toward more proactive work, albeit slowly

For companies that have invested in the technological infrastructure necessary to support advanced tax technologies, the payoff is becoming increasingly evident.

According to the report, about two-thirds (67%) of tax professionals surveyed said their company’s investment in technology had enabled a shift toward more proactive tax work within their departments. This shift is particularly noticeable at large corporations, at which, unsurprisingly, investment in tax technology has been more generous.

The 2026 Corporate Tax Department Technology Report also explores other aspects of corporate tax departments, including their hiring practices, tech training, purchasing strategies, what they see as the most popular tech tools for tax, and numerous other factors that affect how tax departments operate.

You can download

a full copy of the Thomson Reuters Institute’s here

Key findings:

• • • The market remains strong, but growth is difficult — Australian law firms are still posting solid demand and rate growth in the first half of FY 2026, yet the pace is becoming more challenging to sustain.

    • Australia is no longer a single legal market, but three distinct ones — The report identifies three clearly differentiated law firm segments: Large firms leading demand growth through aggressive investment; Big 8 firms emphasizing pricing power and cost discipline; and Midsize firms pursuing steadier, more moderate growth.

    • Early signals suggest GenAI is reshaping productivity and leverage — Changes in hours worked across seniority levels point to possible early impacts of GenAI; and while overall productivity is stable, non‑equity partners and associates are logging fewer hours, while senior associates and equity partners are working more.

The Australian legal market enters the back half of FY 2026 with strong topline numbers, but beneath the surface, the market is working harder to maintain its momentum. Firms are navigating slower rate growth, shifting demand patterns, and the early tremors of what may prove to be a generative AI-driven transformation.

Solid footing, harder-won gains

Australian law firms built an impressive track record over the post-pandemic era, and the first half of FY 2026 shows that run may not be over yet — although its character is changing. Demand growth of 4.8% year-to-date sits a full percentage point above the average quarterly pace since FY 2022, according to the Thomson Reuters Institute’s just-released 2026 Australia: Midyear Legal Market Update report. Worked rates, meanwhile, rose 4.7%, which is respectable, but a noticeable step down from the 5.4% average growth firms had enjoyed since FY 2022.

At the practice level, the picture is broadly encouraging. Both transactional and counter-cyclical practice groups are accelerating, with workplace relations leading all practices at 9.9% year-to-date growth and corporate general close behind at 7.7%. However, a potential warning sign lies in the divergence among each macro-category’s flagship practice: insolvency & restructuring is surging at 7.9%, while mergers & acquisitions sits in contraction at -2.1%. If dealmaking remains subdued while restructuring activity accelerates, transactional practices could face meaningful headwinds in the quarters ahead.

Three markets, not one

Perhaps the most significant finding in this year’s report is what the market-wide averages have been concealing. Last year’s Australia State of the Legal Market report highlighted growing competition between the Big 8 and a broader group of Large law firms that were challenging the Big 8’s dominance. This year, a refined three-segment framework reveals that the former Large category was actually masking two very different stories, between Large firms and a newly identified set of Midsize firms.

The newly delineated Large firms have emerged as the clear demand leaders, posting nearly 7% year-to-date growth — roughly double their peers — fueled by aggressive investment and expansion. The Big 8, by contrast, are leaning into pricing power and cost discipline, growing demand at a more measured 2.7%. And the Midsize cohort, at 2.4% demand growth, is charting a balanced, moderate course.

The profitability divergence is even more striking. Since FY 2022, the firms now classified as Large have grown profits per lawyer by 27.4%, while Midsize firms managed just 3.1% — much closer to the Big 8’s 7.1% than to their former stablemates. What previously appeared to be a broad-based challenge to the elite was, in reality, concentrated among a smaller group of high performers that were pulling the average upward.

Early signals of AI-driven change

The report also surfaces a potentially significant development in law firm productivity. While overall hours worked per month ticked up slightly for the average qualified fee earner, the gains are unevenly distributed. Non-equity partners recorded their third consecutive productivity decline, and junior and mid-level associates are also slightly down. Yet senior associates and equity partners are logging more hours, keeping overall numbers stable. One possible explanation is GenAI — if firms are deploying these tools most heavily on research, drafting, and document review tasks that traditionally filled junior and mid-level associate hours, this is precisely the pattern we would expect to see. While it’s too early to draw solid conclusions, the distribution of hours may represent an early sign of how AI is beginning to reshape the traditional leverage model.

There is also a note of caution from firms’ clients. ¶¶ŇőłÉÄę Market Insights data shows Australian general counsel growing more conservative in their spending outlook, with net spend anticipation for overall legal work dropping to 0 points. That means just as many GCs see their legal spend increasing as those that anticipating it decreasing.

Interestingly, international legal spend tells a different story — Australia-based GCs are increasingly looking outward, with the Asia-Pacific and Latin American regions emerging as areas of particular activity, while Europe has cooled. For Australian firms with cross-border ambitions, the short-term opportunity may lie to the global east and south rather than west.

Looking into the second half of the year

As the Australian legal market moves into the second half of FY 2026, the story is no longer one of uniform prosperity but rather, one of strategic differentiation. Demand remains healthy, profitability is solid, and expense discipline is improving; however, growth is no longer evenly distributed. The law firms that thrive in the quarters ahead will be those that understand which game they’re playing. In an increasingly segmented market, adaptability — not scale alone — will define success.

You can download a full copy of the Thomson Reuters Institute’s “2026 Australia: Midyear Legal Market Update” report by filling out the form below:

Key findings:

• • • AI adoption accelerates across professional services — Organization-wide use of AI in professional services almost doubled to 40% in 2026, with most individual professionals now using GenAI tools, and many preparing for the next wave of tools such as agentic AI.

    • Strategic integration and measurement lag behind usage — While AI use is widespread, only 18% of respondents say their organization tracks ROI of AI tools, and even fewer measure AI’s impact on broader business goals such as client satisfaction or revenue generation.

    • Communication around AI use remains inconsistent — While most corporate departments want their outside firms to use AI on client matters, less than one-third are aware whether their firms are doing so. Meanwhile, firms report receiving conflicting instructions from clients about AI use, highlighting a need for clearer dialogue and shared strategy around AI adoption.

Over the past several years, AI usage within professional services industries has come into focus. As we enter 2026 in earnest, the early adoption phase of generative AI (GenAI) has come and gone. Today, most professionals have experimented with some form of GenAI, and many organizations integrated GenAI into their workflows — and now, a number are preparing for the next wave of technological innovation such as agentic AI.

Given this, the question for professionals and organizational leaders has now become: What will be AI’s long-term impact on my business?

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2026 AI in Professional Services Report

To delve into this question further, the Thomson Reuters Institute has released its 2026 AI in Professional Services Report, which takes a broad view into the current usage and planning, sentiment towards, and business impact of AI for legal, tax & accounting, corporate functions, and government agencies. Taken from a survey of more than 1,500 respondents across 27 different countries, the report finds a professional services world that has embraced AI’s use but is continuing to evolve business strategy around its implementation.

For instance, the report shows that to 40% in 2026, compared to 22% in 2025 — and for the first time, a majority of individual professionals reported using publicly-available tools such as ChatGPT. Additionally, a majority of respondents said they feel either excited or hopeful for GenAI’s prospects in their respective industries, and about two-thirds said they felt GenAI should be applied to their work in some manner.

At the same time, however, many are exploring GenAI tools without much guidance as to how that use will be quantified or measured. Only 18% of respondents said they knew their organization was tracking return-on-investment (ROI) of AI tools in some manner, roughly the same proportion as last year. And even among those tracking AI metrics, most are tracking mainly internally-focused, operational metrics; and only a small proportion analyzed AI’s impact on their organization’s larger business goals — such as client satisfaction, external revenue generation, and new business won.

This slow move to strategic thinking also impacts client-firm relationships. Although more than half of both corporate legal departments and corporate tax departments want their outside firms to use AI on client matters, less than one-third said they were aware whether their firms were doing so or not. From the firm standpoint, meanwhile, confusion reigns: 40% of firm respondents said they have received orders both to use AI on matters and not to use AI on matters from various clients.

Indeed, bout three-quarters of corporate respondents and firm respondents agreed that firms should be taking the lead in starting these conversations around proper AI use. Yet these discussions have not yet happened en masse. “Firms are reluctant — they claim it would compromise quality and fidelity,” said one U.S.-based corporate chief legal officer. “I think they are threatened by it.”

All the while, technological innovation progresses ever quicker. This year’s version of the report measures agentic AI use for the first time, finding that already 15% of organizations have adopted some type of agentic AI tool. Perhaps more interesting, however, is that an additional 53% report their organizations are either actively planning for agentic AI tools or are considering whether to use them, indicating perhaps an even more rapid pace of adoption than we’ve already seen with the speedy rise of GenAI.

Overall, the report makes it clear that most professionals do understand that change, driven by AI in the workplace, is undoubtedly here. Even compared with 2025, a higher proportion of professionals said they believe that AI will have a major impact on jobs, billing and revenue, and even the need for legal or tax & accounting professionals as a whole. The percentage of lawyers calling AI a major threat to the unauthorized practice of law rose to 50% in 2026 from 36% in 2025.

Further, this report paints the picture of a professional services world that has embraced AI, begun to see its impact, and realized that it will have broader business and industry implications than previously imagined. As a result, the time for professionals and organizations to begin planning in earnest for an AI future has already arrived.

As a corporate general counsel from Sweden noted: “We cannot keep up with the modern-day corporations’ demands unless we also develop and adapt our way of working.”

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a full copy of the Thomson Reuters Institute’s 2026 AI in Professional Services ReportĚýłó±đ°ů±đ

Key insights:

• • • AI usage in courts needs verifiable reliability— Unlike other fields, errors and hallucinations caused by AI in a court setting can create due-process issues.

    • Skepticism is professional responsibility— Judges’ interrogation of AI sources and accountability concerns are vital guardrails to minimizing these problems.

    • Governance over perfection— Courts and legal professionals should focus on systematic management of AI hallucinations through clear protocols, human oversight, and mandatory verification to ensure veracity.

AI hallucinations have become one of the most urgent and most misunderstood issues in professional work today; and as generative AI (GenAI) moves from and interesting experiment to common usage in many workplace infrastructures, these issues can cause significant problems, especially for courts and the professionals and individuals that use them.

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Responsible AI use for courts: Minimizing and managing hallucinations and ensuring veracity

Today, AI can be used in everything from assisted research to guided drafting of documents, court briefs, and even court orders. With the development of tools supported by GenAI and agentic AI, the very infrastructure of professional work has shifted to include these offerings.

Yet, in most business settings, a wrong answer is an inconvenience. It requires minor corrections and has minimal impact. In the justice system, a wrong answer can be a due-process problem that strongly underscores the need for courts and legal professionals to ensure that their AI use is verifiably reliable when it counts.

At the same time, the direction of travel is clear: AI adoption isn’t a fad we can simply wait out, and it isn’t inherently at odds with high-stakes decision-making. Used well, these tools can reduce administrative burden, speed up access to relevant information, and help court professionals navigate large volumes of material more efficiently. The real question is not whether courts will encounter AI in their workflows, but how they will define responsible use, especially in moments in which accuracy isn’t a feature, it’s the foundation.

“Whether you are a judge [or] an attorney, credibility is everything, particularly when you come before the court.”

— Justice Tanya R. Kennedy Associate Justice of the Appellate Division, First Judicial Department of New York

To examine these issues more deeply, the Thomson Reuters Institute has published a new report, , which frames hallucinations not as a sensationalistic gotcha, but as a practical risk that must be managed with policy, process, and professional judgment. The report also features valuable insight on this subject from judges and court stakeholders who today are evaluating AI in the real operating environment of legal proceedings, courtroom expectations, and the daily administration of justice.

This perspective is essential. Technical teams can explain how models generate language and why they sometimes produce confident-sounding errors. However, judges and court staff can explain something equally important — what accuracy actually means in practice. In courts, accuracy isn’t just about getting the gist right; rather, it’s about precise citations, faithful characterization of the record, correct procedural posture, and language that withstands scrutiny. As the report points out, relied-upon hallucinated information isn’t merely bad output, it can lead to a potential distortion of justice.

Managing AI as professional responsibility

Crucially, the report reflects that judicial skepticism about AI is not simple technophobia — it’s professional responsibility. Judges are trained to interrogate sources, weigh credibility, and understand the downstream consequences of errors. Judges may ask, What is the provenance of this information? Can I reproduce it independently? And who is accountable if it’s wrong? These questions aren’t barriers to innovation; indeed, they are the guardrails that this innovation requires.

What emerges is a pragmatic middle ground that embraces the upside of AI use in courts while treating hallucinations as a predictable occurrence that can be managed systematically. Rather than concluding AI hallucinates, therefore AI can’t be used, the more workable conclusion is AI can hallucinate, therefore AI outputs must be designed, handled, and verified accordingly, likely with other advanced tech tools. As the report points out, courts don’t need a perfect AI; rather, they need repeatable protocols that keep human decision-makers in control and keep the record clean.

As the report ultimately demonstrates, managing hallucinations in courts isn’t about chasing perfection, it’s about protecting veracity. It’s about using the right advanced tech tools to build workflows in which the technology consistently supports the truth-finding process instead of quietly eroding it. And it’s about recognizing that in the legal system, responsibility doesn’t disappear when a new tool arrives — it becomes even more important to ensure the new tool doesn’t erode that either.

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a full copy of the Thomson Reuters Institute’s Ěýłó±đ°ů±đ

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2026 Report on the State of the US Legal Market

As the data underpinning the just-released 2026 Report on the State of the US Legal Market — published jointly by the Thomson Reuters Institute and the Center on Ethics and the Legal Profession at Georgetown Law — makes clear, the industry is experiencing its own tectonic moment. Fundamental forces such as shifting client power, economic instability, and technological disruption are pushing some firms to extraordinary heights while leaving others on increasingly unstable ground.

This year’s report examines how the legal market’s current elevation came to be, why it may not last, and what firms can do now to prepare for the inevitable shift.

Key findings in the report

Some of the key findings discussed in this year’s report include:

• • • Unprecedented demand surge amid market redistribution — The US legal market experienced some of the strongest demand growth in more than a decade, driven in part by regulatory shifts and geoeconomic instability. Critically, smaller firms captured the lion’s share of growth as clients moved demand from the most expensive firms to lower-cost alternatives.
    • Intense expense growth — Technology spending and talent costs are rising rapidly, with firms aggressively investing in AI capabilities while simultaneously expanding headcount. This dual arms race is sustainable only so long as demand and rate growth can be maintained as well.
    • Structural business model conflict — The industry remains trapped between transformative technology and outdated billing structures. Despite heavy AI investments that will fundamentally alter how legal work is performed, 90% of legal dollars still flow through hourly billing arrangements that may no longer reflect the value delivered.
    • Deteriorating buyer sentiment — Many corporate general counsels (GCs) are signaling that they are considering significant spending pullbacks ahead, with Net Spend Anticipation dropping to levels not seen since the pandemic. Financial forecasts increasingly point to contraction by mid-2026.
    • Historical warning patterns — Today’s legal market dynamics (represented by booming demand amid instability, runaway expenses, and universal optimism) closely mirror the conditions that preceded previous industry downturns in 2007 and 2021.

As the report makes clear, the challenges ahead are significant. The same forces creating today’s peaks are simultaneously undermining the ground beneath them. The surge in demand stems not from economic health but from chaos — trade wars, regulatory upheaval, and geopolitical tensions — all while GCs face stagnant budgets and intensifying pressure to demonstrate value.

While much of this is outside firms’ control, however, their response to it is not. The report clearly shows that those firms that use the current boom to reinforce their footing by modernizing pricing models, strengthening client relationships, and deploying technology in ways that deliver measurable value rather than marketing gloss will be best positioned for what comes next.

As this year’s report illustrates, 2025 was less a summit than an inflection point. The firms that treat elevation as permanence may find, as countless mountain ranges have over geologic time, that height is not a promise — it’s a phase.

You can download

a full copy of “2026 Report on the State of the US Legal Market,” published jointly by the Thomson Reuters Institute and the Center on Ethics and the Legal Profession at Georgetown Law, by filling out the form below:

Key insights:

• • • Compliance is becoming a technology arms race— Criminals are rapidly deploying AI, automation, and cryptocurrency to execute sophisticated fraud on a large scale, while many compliance departments remain stuck with legacy systems, creating a technological gap.

    • AI represents a dual-edged sword for compliance — Organizations must strategically determine appropriate AI applications while maintaining rigorous human oversight and validation protocols.

    • Regulatory fragmentation is creating operational complexity — The compliance environment is splintering, and this fragmentation demands creating near-real-time automated systems and abandoning manual compliance processes.

The world of compliance and risk management is evolving quickly. Criminals, regulators, and markets are all moving faster, often powered by AI and digital innovation. As a result, compliance can no longer function as a static control department; rather, it must become an intelligent, tech-enabled risk partner to the business.

To examine this evolving terrain more deeply, the Thomson Reuters Institute has published a new digital report, 10 Global Compliance Concerns for 2026, that draws on interviews with compliance and other area experts to map out the critical challenges ahead and help determine what organizations need to do now to prepare.

10 critical risk areas

Based on extensive interviews with these experts, the report identifies 10 areas in which today’s compliance leaders should expect heightened scrutiny in 2026. These areas span tech-enabled fraud and scams, ethical AI use, crypto-assets entering mainstream finance, expanding data privacy obligations, and the professionalization of cybercrime.

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10 Global Compliance Concerns for 2026

The experts we interviewed also highlight shifting financial crime enforcement priorities, escalating sanctions and tariff risks, complex reporting requirements around ESG issues, third-party oversight challenges, and accelerating regulatory changes across AI, cybersecurity, climate, and digital assets.

Across all 10 areas, the specialists interviewed stress that organizations will need stronger governance, smarter technology, and better-trained people in order to keep pace.

Interestingly, several developments stand out as game-changers in the report. For example, fraud seems to be entering a new era, one in which criminals aggressively adopt AI, automation, and crypto to scale up attacks while many compliance teams still rely on outdated tools. Smaller financial institutions, fintechs, and digital platforms are particularly vulnerable without advanced monitoring and analytics capabilities, area experts explain.

“AI is a force multiplier for criminals, and they are exploiting that technology however they can,” says Urriolagoitia “Rio” Miner, the founder and CEO of , adding that “banks and financial institutions tend to move slowly, but hopefully they will start incorporating more AI tools as well to fight back.”

The risks and opportunities of AI

AI itself presents both opportunity and risk on the compliance landscape. The experts interviewed urge organizations to think strategically about in which areas AI can enhance investigations, monitoring, and due diligence, and where it introduces unacceptable ethical or privacy concerns. Human oversight and robust validation remain essential.

Another potential development is that crypto is now mainstream, creating urgent demands on compliance officers to understand digital assets, stablecoins, and emerging regulatory frameworks. Experts emphasize that applying traditional risk-based approaches becomes far more complex when teams lack familiarity with blockchain activity and crypto-enabled crime patterns. Further, data privacy and cybersecurity stakes are rising as regulators grow increasingly intolerant of weak controls. Yet, technology is only half the solution, the area experts consulted note, and cultural factors and ongoing training are equally critical.

“AI technology presents tremendous opportunities for improving efficiency and reducing costs within compliance programs,” says Teresa Anaya, founder and director of AML Audit Advisory.  However, she adds, “AI adoption must be approached thoughtfully and responsibly, and be conducted with expert human oversight.”

Finally, regulatory change itself is a structural risk. The volume, speed, and complexity of new requirements are outpacing many compliance teams’ manual processes. Organizations need to invest in scalable technology and automation so that their compliance teams can simply keep up, experts warn.

Priorities for action

The report concludes with practical priorities drawn from these expert insights. for example, organizations should refresh enterprise-wide compliance risk assessments and strengthen governance and accountability, especially around AI and vendors. And as mentioned, investing in modern compliance and automation technologies is critical, as is updating policies for emerging risk domains.

For boards, executives, and compliance leaders, the expert consensus is clear: 2026 will reward those organizations that treat compliance as a forward-looking strategic capability that is fully integrated with technology, risk, and business decision-making.

You can access

a full copy of the Thomson Reuters Institute’s new digital report, 10 Global Compliance Concerns for 2026, here

Key insights:

• • • Advisory is becoming the strategic core of tax practices — Tax firms are no longer treating advisory services as an add-on to compliance work but rather as a fundamental driver of business strategy, client relationships, and sustainable revenue growth.

    • Frequent client engagement drives measurably better outcomes — Professionals from firms that meet with clients quarterly or more frequently report significantly higher satisfaction across every dimension.

    • Technology and capacity are the keys to breaking through barriers — Firms are rapidly adopting automation to free up their professionals for advisory work, while addressing staff skills gaps through training and strategic hires.

For decades, tax firms built their practices around the predictable calendar of the annual compliance cycle, punctuated by occasional client requests for advice. Over the past five or more years, however, there’s been a seismic shift. Tax advisory services are emerging as the defining strategic function within successful firms, and it’s being driven mostly by an unprecedented convergence of regulatory complexity, technology capabilities, and evolving client expectations.

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2026 Tax Firm Advisory Services Report

As a result, many firm leaders are fundamentally rethinking their business models, reimagining what a tax practice can be as they move from being transactional service providers to becoming more strategic advisors that can guide clients through complex financial decisions year-round.

To delve into this deeper, the Thomson Reuters Institute has published the 2026 Tax Firm Advisory Services Report, that clearly shows that as regulatory complexity and client expectations mount, firms that systematically invest in building advisory capabilities are outperforming their peers by significant margins — and the performance gap is widening.

From compliance shop to strategic advisor

For tax firm leaders, this transformation represents both validation and opportunity. The numbers tell a compelling story, especially for firms that are proactively leading the strategic elevation of their advisory capabilities. Among surveyed respondents from firms experiencing revenue growth, 88% report that advisory revenue is growing faster than compliance revenue and that advisory services now represent an average of 31% of total firm revenue.

Not surprisingly, many forward-thinking firms are backing this shift with concrete plans. Nearly 9-in-10 respondents say their firms are planning to expand their advisory services within the next year.

The engagement advantage

What’s driving this transformation? According to the report, the quality and frequency of client relationships have fundamentally recast what’s possible in tax advisory services. Firms that meet with clients quarterly or more frequently see dramatically different outcomes than those meeting clients just once or twice a year.

Tax professionals from firms with quarterly touchpoints rated their own satisfaction significantly higher across every dimension measured, such as knowledge of the client’s business, understanding the client’s industry sector, the overall strength of the client relationship, and the range of services the client uses. Even more compelling, almost 90% of respondents from firms with more frequent client engagement report that advisory revenue growth is outpacing compliance growth compared to just 65% of respondents from firms with less frequent client contact.

As the report underscores: This message is unmistakable — relationship depth directly drives revenue growth. Firms that use quarterly or more touchpoints with clients are more successfully converting compliance-only relationships into comprehensive advisory partnerships at substantially higher rates than their less-engaged competitors.

The challenging landscape

Despite the opportunities that abound in advisory services, many firms face real obstacles in expansion, the report shows. More than half (52%) of respondents cite staff skills gaps among their colleagues as their biggest challenge, followed closely by client resistance to paying for advice (47%).

These challenges create a reinforcement loop that can trap firms in their current state: Staff lack advisory skills, so they focus on compliance work, leaving no time to develop advisory capabilities or engage clients proactively. Then, clients don’t see the value of advisory services because they haven’t experienced them, and the cycle continues.

Breaking this loop requires intentional strategy and systematic execution — which is exactly what leading firms are doing differently, the report shows.

How strategic priorities are reshaping the profession

The ripple effects from this advisory transformation have dramatically reshaped strategic priorities for tax firms beyond routine concerns about service expansion. These new priorities represent fundamental shifts in how firm leadership view the purpose of their firm, its client relationships, and competitive positioning.

Interestingly, while revenue objectives dominate the top priorities, 13% of firm leaders cite developing more intellectually stimulating work for their teams as a key objective, the report shows. This speaks to a deeper strategic consideration — that advisory work itself offers the kind of challenging, engaging work that attracts and retains top talent in an increasingly competitive labor market.

Today, the opportunity is here for tax firms to capitalize on this momentum and operationalize their advisory services offerings through formalized processes, systematic client engagement, technology leverage, and value-based pricing that creates enduring competitive advantages.

As the report shows, tax advisory today is moving beyond simply offering occasional consulting services alongside compliance work. And with the strategic elevation of tax advisory services already underway, it’s those firms that move quickly enough to capture the opportunity that will flourish.

You can download

a full copy of the Thomson Reuters Institute’s “2026 Tax Firm Advisory Services Report” by filling out the form below:

Key insights:

• • • Trade teams are becoming strategic business partners — Trade is no longer an administrative, reactive function but rather a driver of business strategy and operational resilience.

    • Tariff mitigation strategies — Many organizations are absorbing tariff costs as a tariff mitigation strategy.

    • Technology adoption is surging — Organizations are rapidly adopting automation to improve efficiency and supply chain visibility and are exploring AI and other advanced technologies.

For decades, corporate trade departments have operated in relative obscurity, being viewed largely as cost centers that manage compliance and transactional paperwork. Over the past 12 months, however, there’s been a dramatic change. Corporate trade departments are emerging as a strategic business function within their organizations, due mostly to the unprecedented wave of tariff volatility that is forcing businesses to fundamentally rethink how they view trade management, according to the Thomson Reuters Institute’s 2026 Global Trade Report.

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2026 Global Trade Report

As a result, organizations are looking to their trade leaders to analyze, strategize, and execute key realignments of supply chains, markets, operations, facility locations, and more. “The financial burden caused by tariffs led our company to reorganize our supply chain and production footprint in order to reduce tariff exposure and preserve profitability,” notes one trade professional in the report.

From back office to boardroom

For trade professionals, this change represents both validation and opportunity. Indeed, the numbers tell a compelling story, especially for vanguard organizations that are proactively leading the strategic elevation of their trade functions. About 40% of global trade professionals surveyed for the report say they’ve seen enhanced influence over procurement decisions and greater involvement in executive decision-making over the past 12 months. Many also note the increased visibility of their function’s value across the organization as well.

And forward-thinking organizations are backing this shift with more resources. Many survey respondents say their organizations are increasing budget allocation for hiring, technology solutions, and training and development. And survey respondents also report increased cross-functional collaboration with other in-house departments, such as Finance, Operations, IT, and Procurement/Supply Chain.

The tariff reality check

What’s driving this transformation? According to the report, tariffs have fundamentally recast the entire global trade environment. Almost three-quarters (72%) of trade professionals cite US tariff volatility as the most impactful regulatory change they’re facing, which is up dramatically from just 41% who said this a year earlier.

However, it’s not just about the tariffs themselves. The cascading effects of tariffs touch every corner of business operations, leaving companies to grapple with increased regulatory compliance burdens, as well as significant cost pressures on imported materials and components.

One of the most striking findings in the report is the dramatic acceleration in trade departments’ technology adoption, as trade professionals seek to increase efficiency and improve visibility across the supply chain. About 40% of respondents say their departments are exploring emerging technologies like AI or blockchain for trade management, up from just 6% in 2024 — a nearly sevenfold increase.

Even more revealing is that only 2% of trade professionals now consider their department to be in the early stages of technology adoption, a huge drop from 40% previously. It appears the industry has collectively decided that manual processes and legacy systems are no longer viable in today’s volatile environment.

As a result of the tariff disruption, many organizations are scrambling to adopt strategies that will both minimize the immediate impacts of the tariffs and also position them for a global trade environment that has fundamentally shifted long-term.

Particularly sobering is the fact that 39% of respondents say their organizations are absorbing or considering absorbing tariff costs rather than passing them to customers — triple the 13% who said that a year earlier. This dramatic shift speaks volumes about competitive pressures and the threats that tariffs pose to profitability.

Shifting priorities

Not surprisingly, the ripple effects from tariffs have dramatically reshaped strategic priorities. These aren’t routine worries about supply chain optimization — indeed, they represent fundamental concerns about systemic resilience amid volatility that has reached unprecedented levels.

Supply chain management has surged as the top concern for trade professionals, cited by 68% of respondents — nearly double the percentage from a year earlier. Regulatory compliance has similarly intensified. “Customs paperwork and adjustments to tariff categorization are making trade compliance and operational planning more difficult,” explains one trade professional.

The path forward

The opportunity for trade professionals is to capitalize on this newfound influence and operationalize their heightened strategic organizational involvement through formalized processes and policies that create enduring competitive advantages, including more collaboration, leveraging increased boardroom visibility, and more.

As the report shows, trade today is moving beyond simply managing risks from supply chains and compliance and toward becoming increasingly central to strategic business planning. And those organizations that recognize trade as a strategic function worthy of investment and executive attention, and view technology as a force-multiplier for human expertise will gain significant advantages.

The strategic elevation of the trade function is already underway, making the question not whether it will continue, but rather which organizations will take full advantage of it.

You can download

a full copy of the Thomson Reuters Institute’s “2026 Global Trade Report” by filling out the form below: