Originally published on LinkedIn on 11 June 2026.
The legal sector just recorded its highest growth in fifteen years. Fees are up, demand is strong, and the P&L is pointing in the right direction. The sharper question, and the one worth asking while the numbers are strong, is this: how much of what we’ve earned are we actually banking?
The Law Society’s Financial Benchmarking Survey 2026 found that 85% of UK law firms reported year-on-year fee growth in 2025, with more than half growing by 10% or more, the highest rate of growth in over fifteen years. Running alongside that, BigHand’s 2026 Finance Report, drawn from 800 senior finance and legal leaders across the UK and North America, found that nearly 90% of firms confirmed increased write-offs and 88% expect them to rise again in 2026, up from 49% the year before.
These are different surveys with different sample sizes and different populations, but what they share is a direction of travel, the sector is growing, and the leakage is accelerating alongside it.
Why growth makes write-offs easier to absorb
A firm with rising fee income develops a natural tolerance for write-offs. The numbers are moving in the right direction, the P&L looks healthy, and when a write-off lands in the finance meeting it gets approved, a figure is recorded, and the agenda moves on. What rarely happens is the question that should sit underneath every approval: what produced this, and will it happen again?
A write-off absorbed without that question does not disappear. The blind spot that created it keeps running, and those blind spots look different depending on where they sit. The scope shift with the client that was never raised because the relationship felt too fragile to risk. The hours written off to protect a junior’s morale because absorbing the cost felt kinder than having the conversation.
The informal advisory that happened on WhatsApp at 10pm and never reached a timesheet, because the partner assumed the team knew to capture it.
Three different blind spots producing the same outcome on the P&L, and the same question that never gets asked: what produced this, and will it happen again?
Individually, none of these feels like a crisis and in the moment, each feels like a reasonable judgment call made under pressure. Across a quarter, a year, and a growing team working at pace, however, they accumulate into the number sitting quietly behind your realisation rate, visible in the data but invisible in the conversation.
Five questions your finance data can already answer
These are not rhetorical. Each has a retrievable answer inside your firm right now, and each one points to a different place where the leakage is forming.
1. What is your write-off rate on matters where the scope changed after instruction?
Scope changes are a common trigger for write-offs that nobody questions. A scope change should be a recorded event in your practice management system, which means the data is already there. If your write-off rate on those matters is materially higher than your firm average, you are not looking at a scoping problem. You are looking at a communication pattern that your sign-off process has been treating as a routine cost of doing business.
2. What is your write-off rate on matters that exceeded their original budget or time estimate?
Matter overruns and write-offs are not the same thing, but they travel together more often than firms examine. When a matter exceeds its budget, someone made a decision consciously or not to keep the work moving without resetting expectations with the client or the team. That decision can feel like management in the moment. Over time, it becomes the pattern.
The question worth asking is not how large the overrun was, but when did it become visible and who knew about it first? If the partner knew before the fee earner, the overrun was absorbed at the top rather than surfaced early, and that is the dynamic most likely to repeat on the next matter.
3. What reason is recorded on your last ten write-off approvals?
Read the language carefully. If the stated reason is consistently some version of “client relationship,” “scope change,” or “matter complexity,” what you are looking at is a communication pattern that has been recorded as a commercial decision. The write-off was real but the reason on record is the polite version of what produced it.
4. How much of your write-off volume sits in fixed-fee or capped matters?
On fixed-fee work, unrecorded time never reaches a write-off figure because it was never going to be itemised in the first place. It simply leaves no trace. The informal call that reassured a client, the email sent at 9pm, the unscheduled conversation that kept a matter on track, each is real work the firm did for free without choosing to.
When the scope of a fixed-fee matter shifts mid-file, that invisible volume compounds. More work gets done, none of it gets captured, and none of it triggers a conversation. It doesn’t appear in your write-off figures because the system was never designed to see it.
5. When did your write-off rate start climbing, and what else changed at the same time?
This is the question that moves write-offs from a finance conversation into a leadership one. A write-off rate that begins moving at a specific point in time is telling you something about what changed at that moment, not in the market, but inside the firm. A partner promoted into their first leadership role. A team that expanded faster than its communication structure could absorb.
A client relationship that grew quickly, bringing more instructions, more informal contact, and more scope changes than the partner was keeping the team informed of.
The timing question will almost always point to a moment when pace outran structure. That is where the pattern began. The write-offs are simply where it eventually became visible.
The opportunity inside the numbers
Nearly 90% of firms surveyed confirmed increased write-offs against a backdrop of fifteen-year record growth. That combination tells you one thing: a meaningful share of what firms are already earning is leaking before it converts to margin. For managing partners who see it clearly, this is not a liability. It’s the most immediate commercial opportunity sitting on their desk.
The communication gap between what the partner knows and what the team knows is an operational blind spot, and like all blind spots it’s invisible to the person carrying it until someone looks in the right place.
The firms that close it will bank more of what they have already earned, without winning a single additional instruction.
The bigger opportunity runs deeper than the write-off figures. The growth conditions of 2025 created the right moment to examine the leadership patterns that have been quietly shaping the numbers for longer than the current growth cycle. Firms that use this period of genuine strength to examine how their leadership patterns are shaping their financial performance will build an advantage that is hard to see on a competitor’s P&L and harder still to replicate.
The Blind Spot Brief publishes every Thursday. If a managing partner in your network would find this useful, forward it directly.
The free TrustLytics® diagnostic takes 15 minutes. It surfaces the six operational blind spots most commonly found in law firms and shows you where the patterns are sitting in your firm. The full report quantifies how much is leaking and what can be recovered. Start with the free diagnostic here: https://www.thomastelman.com/leadership-blind-spot-financial-risk-diagnostic