2025 was a year of resilience for the Professional Services sector, with firms navigating margin pressures and a shifting macroeconomic landscape to deliver robust results.

As we move into 2026, the sector stands at a turning point. The pace of change is accelerating, and the ability to adapt – through technology, talent, and sustainability – will separate the leaders from the rest.

Private equity continues to reshape the market, particularly in the legal space, driving consolidation and making scale and efficiency essential for survival. Firms are increasingly looking to mergers and acquisitions to secure their position, especially in regions where PE investment is well established.

Artificial Intelligence remains the sector’s most talked-about disruptor. While 2025 saw AI largely confined to back-office automation, the coming year could see a shift towards client-facing applications - delivering not just efficiency, but real gains in accuracy, insight, and profitability.

The firms that invest now in GenAI and workflow automation will be best placed to unlock new service models and competitive advantage.

Attracting and retaining talent remains the number one challenge, as highlighted in our latest NatWest Legal Report. Culture, flexibility, and purpose-driven leadership are now deal-breakers for top professionals. 

ESG credentials have moved from the margins to the mainstream, with clients and employees alike demanding more than policies; they want proof of delivery. B Corp certification, green finance, and measurable sustainability outcomes are fast becoming the new standard for winning business and attracting talent.

Margin pressure is set to intensify as the Bank of England is expected to lower base rates, reducing investment income and putting a sharper focus on core profitability. Firms will need to double down on time capture, matter management, and cash discipline to protect margins.

Cybersecurity is another silent threat, with legal and accountancy firms prime targets for cyberattacks. In 2026, cyber resilience will be a board-level priority, with robust insurance and proactive risk management now essential for business continuity and client trust.

Regulatory change is also on the horizon. The FCA’s move to become the sole AML supervisor for the sector will bring higher fees and stricter compliance requirements.

Meanwhile, the SRA’s Consumer Protection Review keeps the spotlight on client money rules and operational risk. Key dates to watch include the FCA AML supervision transition announcement and the October release of our Legal Report.

Reflecting on 2025, it’s clear that operational discipline remains the foundation, but bold innovation will define the leaders of tomorrow. The legal sector, in particular, saw improved profitability through tighter time capture, controlled headcount growth, and better cash management.

The lesson is clear: fundamentals win, but those who combine them with forward-thinking strategies in technology, talent, and ESG will set the pace for the sector.

David Weaver, Head of Professional Services at NatWest, says: "2026 will be a pivotal year for Professional Services. The firms that pull ahead will combine disciplined fundamentals such as time capture, scoping and matter management, together with targeted AI deployment – moving from admin automation to client-impacting use cases – and underpin it all with a credible ESG story.

“That’s how you protect margins today and build sustainable growth for tomorrow.”"

“2026 is set to be a year of transformation. Firms that embrace technology, prioritise talent, and deliver on ESG will not just weather the change – they’ll set the pace for the sector. Those who stand still risk being left behind.”

Dive into the full set of 2026 sector insights and discover our practical guidance to get your business Future Fit for 2026: Sector Trends