AI, structural expansion and shifting regulations are increasing complexity for businesses.
Professional services outlook key takeaways
Private equity investment and strategic acquisitions are reshaping the sector’s structure.
With the cost of capital rising, firms are prioritizing fewer, higher-impact investments.
What is the professional services outlook?
RSM’s professional services outlook examines key trends shaping the industry throughout the year. Companies are rethinking traditional workforce models as artificial intelligence becomes more prevalent. Governments, such as in the UK, are promoting AI adoption through incentives and national strategies. Firms must invest in AI literacy, foster human creativity and adapt to technological change.
Professional services trend #1: Increasing complexity and rising capital costs
Rapid advances in AI, structural expansion and ever-evolving regulation are leading to increased complexity for leaders, specifically around capital generation and allocation. These factors are reshaping how firms compete, deliver value and sustain profitability. For leaders, understanding these trends is essential to navigating an environment where uncertainty is the only constant.
Professional services trend #2: Shifting workforce models
Shifting workforce models
Professional services firms are increasingly integrating AI to enhance efficiencies and client delivery. Automation through AI is streamlining routine tasks such as document drafting, research and data processing—functions that junior-level staff traditionally handle, especially in law, accounting and consulting firms. This shift is freeing up senior professionals to focus on high-value, strategic work, but it also raises questions about the sustainability of traditional workforce structures.
Professional services trend #3: Rising profitability
Law firms maintain forward momentum with rising profitability.
Bolstered by law service rate growth that has begun to outpace inflation, profitability metrics for law firms continue to improve despite rising challenges in collections. Demand growth for law services remains slow but steady. Transaction demand has declined, but projections imply that the worst is in the rearview mirror for mergers and acquisitions activity.
Professional services trend #4: Midsize law firms employ a new strategy
Midsize firms have taken a very different strategy when it comes to hiring as compared to their larger counterparts.
As the Am Law 100 and midsize firms continue down separate paths strategically, key elements to watch are whether productivity improves among the Am Law 100 during a hiatus in hiring, and whether midsize firms will withstand the margin squeeze as they continue to hire valuable staff.
Regardless of firm size, and despite the unknowns regarding economic growth, all firms can benefit from utilizing AI and conducting a cost-benefit analysis of outsourcing to further bring down expenses and prop up profit margins.
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