Majority of law firms appoint cyber specialists amid rising threats – report

Cybersecurity remains a top priority for UK law firms with 81 per cent of firms having dedicated cyber specialists in place, reflecting a clear shift toward proactive risk management and internal capability building.

The trend comes from Crowe’s Law Firm Benchmarking report, created in collaboration with The Institute of Legal Finance & Management, which reported that 22 per cent of law firms experiencing a cyber incident.

The report also a reveals a 10.82 per cent decline in partner profit pools of regional law firm in the past year in contrast to City law firms who saw a rise of 12.12 per cent despite mounting cost pressures.

Crowe’s report reveals that City law firms are outperforming their regional counterparts, with partner profit pools rising 12.12 per cent despite mounting cost pressures.

This suggests that City firms have maintained tight control over their cost bases, possibly through operational efficiencies, technology adoption, and disciplined resource management.

By contrast, regional firms saw a 10.82 per cent decline, highlighting that fee growth is no longer sufficient to offset inflationary pressures and increased infrastructure investment.

City firms also improved their lock up by 13 days to 135 days, while regional firms saw a modest two day improvement to 140 days. This indicates that metropolitan firms are converting work into cash more effectively than regional firms.

While Work in Progress (WIP) days have remained stable, a reduction in debtor days suggests that firms are becoming more effective in cash collection and credit control. WIP days for City firms remain at 35 days, compared to 71 days for regional firms.

Meanwhile, debtor days for City firms stand at 101 days, while regional firms report 70 days. Interestingly, this indicates that City firms are quicker to issue bills, whereas regional firms are more efficient at collecting payments – perhaps reflecting a greater need for cash to support their cash flow.

Despite inflation sitting at 3.8 per cent, nearly double the Bank of England’s 2 per cent target, revenues increased by an average of 10.84 per cent across all firms.

Regional firms saw the bigger growth here of 12.21 per cent compared to 10.19 per cent for city firms. Firms have a positive outlook for the future, too with 35 per cent looking for more than 10 per cent growth in the current year.

Over 80 per cent of firms now have a net zero plan in place or expect to implement one soon – an increase from 62 per cent last year. This reflects growing awareness of the legal sector’s role in addressing climate change and the importance of aligning with client and societal expectations.

Sue Daye (pictured), Partner, Professional Practices & Private Clients at Crowe, said: “The legal sector continues to show strength and resilience, with solid financial foundations and optimism for achieving future growth targets.

“Concerns around cybercrime continue to rank highly – and rightly so, with 1 in 5 firms experiencing a cyber incident in the past 12 months alone. Investing in shoring up defences against cyber attacks is a priority, alongside carefully managed adoption of new technologies and artificial intelligence tools.

“The next big trend disrupting the sector is private equity investment. PE interest in the sector remains high, as firms are viewed as scalable and investable businesses. For firms, the appeal of external capital injection could clearly prove useful in the pursuit of ambitious growth and innovation targets.

“However, while many scoping discussions are taking place behind closed doors, we are yet to see this translate into concrete investment in a meaningful way – 2026 may be the year that big investments are announced.”

Read the full report here.