Growing as a Small Law Firm in 2026: Where the Real Profit Lies

“For solo and small law firms, profitability is increasingly less about “billing more hours” and more about “working smarter.””

This picture clearly emerges from the 2026 Benchmark Report: Growth and Innovation in Small Law Firms by Wolters Kluwer. More than 600 firms from six European countries participated, including over a hundred Dutch firms, ranging from solo practitioners to firms with more than ten lawyers.

In this blog, we examine what this report means for small Dutch law firms. Where do the opportunities lie, where are things still going wrong, and above all: what can you do differently starting tomorrow?

Three Signals That You Cannot Ignore as a Small Firm

When browsing through the report, three signals immediately stand out. Together, they form the framework within which small firms must make their choices:

• A large proportion of lawyers indicate that less than half of their time is billable.
• Virtually all firms want to invest more in technology in the coming years.
• A majority are already using artificial intelligence applications in their daily work.

In other words: an enormous amount of time is still leaking away to non-billable work, while everyone senses that technology and AI are going to change the way we work. The question, therefore, is not whether you adapt, but how quickly and how purposefully you do so. And it is precisely there that the distinction arises between firms that lead the way and firms that get left behind.

Dutch Firms Are Performing Well, but Sole Practitioners Remain Vulnerable

Dutch firms perform relatively well in the report. A significant portion reports an increase in profitability, and this increase is particularly visible among small firms and sole practitioners. The share of firms with a high percentage of billable hours is also higher in the Netherlands than in other countries.

At the same time, the report reveals something that you cannot ignore as a small practice: sole practitioners are lagging behind.

More than half of the solo respondents spend less than half of their time on billable work. At larger firms, that percentage is considerably lower. This presents a dual image. On the one hand, small firms and solos are the engine of growth and innovation. On the other hand, they are also the most vulnerable. Firms that organize their processes tightly, invest in systems, and establish clear working agreements are flourishing. The rest lose precious hours to administration, loose emails, searching through files, and ad hoc communication.

Where the Money Goes: Hours and Bricks Before Systems

When looking at the cost structure of the firms in the study, a recognizable pattern emerges. A large part of the budget goes toward personnel costs and rent. Technology usually only comes after that. For many firms, this is a reflex: people and square meters first, then systems.

This is understandable, but also dangerous for small firms. Because it is precisely technology that determines whether those expensive hours actually deliver value. Without good systems, much time is lost on searching, retyping, following up, and correcting. In that case, you are paying for the hours, but not for the added value.

Firms that perform well link their spending to a clear question: which investment ensures that we lose less time on non-billable work? And which cost items yield nothing if we do not simultaneously improve our work processes?

Technology and AI: From Side Issue to Primary Growth Engine

In the plans for the coming years, a clear shift is visible: firms want to free up more money for technology. This also applies to Dutch firms. Many firms have recently implemented new software, with an emphasis on practice management, workflows, and knowledge management.

AI is playing an increasingly large role in this. A majority of respondents indicate they are already using AI applications, and another substantial portion intends to start doing so soon.

Consider:

• Text generation for draft letters and memos
• Support for legal research
• Tools for document management and summaries

At the same time, the financial commitment to AI often remains limited. Many firms spend only a small amount per user or stick to free solutions. This shows that AI is still in the experimental phase at many firms: people are trying things out, but not yet integrating it structurally into daily practice.

For small firms, there is an opportunity here. Those who make conscious choices now can gain an advantage. Not by slapping AI onto everything, but by looking purposefully: where in our work week can we truly save time and increase quality with AI?

Using LegalTech Is Not the Same as Leveraging LegalTech

Virtually all firms in the study now use one or more forms of legal technology.

Consider:

• Applications for legal research
• Software for practice and matter management
• Systems for document management and document automation

Lawyers indicate that this technology helps with research, file management, document management, and knowledge sharing. Nevertheless, investments vary widely. Some firms spend substantially on legal technology, while others hardly invest and have no concrete plans.

The main obstacles are recognizable:

• Lack of overview of the offerings
• Uncertainty about the actual return
• Limited budgets, especially for solos and small firms

The difference between “using” and “leveraging” lies in the degree of integration. A standalone tool alongside your existing workflow yields limited gains. But an integrated platform, where case building, time tracking, document management, and invoicing converge, truly changes the way you work.

Clients: Competition on Trust and Experience

Profitability depends not only on internal processes but also on how clients experience your firm. The report shows that firms struggle with changing expectations, declining loyalty, and pressure on rates.

At the same time, there is a striking amount of agreement on what truly sustains long-term relationships:

• Trust and transparency
• Consistent quality
• Excellent customer service

Substantive quality remains the foundation, but it has long ceased to be the only differentiator.

Clients expect:

• Clear communication regarding progress and costs
• Fast, accessible points of contact
• Well-organized digital case files

Technology plays a role here on two levels. On the front end, you can think of client portals, secure digital communication, and fixed response times. On the back end, good systems ensure a complete file, fewer errors, and faster decision-making.

It is noteworthy that many firms do not yet see digital consultation formats as an important factor in relationship management. For small firms, this is a missed opportunity. Online meetings make it possible to serve clients across the country, with less travel time and more flexibility.

What Does This Mean Specifically for Small Dutch Law Firms?

All the figures and graphs are interesting, but ultimately it is about what you do with them tomorrow. For small firms and solo practices, it comes down to a few concrete choices.

1. Make billable time your most important management metric

• Measure exactly how much time is truly billable for at least three months.
• Set a concrete goal, for example: from 50% to 65% billable in one year.
• Link all your process and technology choices to that goal: everything that saves time on non-billable work takes priority.

In this way, billable time becomes not just a retrospective outcome, but an active management tool in your business operations.

2. Automate the basics first, not the exceptions

Do not start with complex exception processes, but with the daily routine that recurs every day:

• Time tracking and hour justification
• Creation of files and standard documents
• Invoicing and payment reminders

When those basics run automatically and reliably, you will have the capacity to improve more complex processes later.

3. Deliberately choose an integrated firm platform

Standalone AI tools are fun to experiment with, but if every system has its own login, data, and workflow, you lose the overview. For small firms, simplicity is a strength.

• Choose a platform where practice management, digital files, document management, and time tracking converge.
• See which smart functions are already in that system, such as automatic summaries, draft texts, or risk signaling.
• Only then supplement with standalone tools if they truly add value.

This prevents you from entering data in five places without having a complete picture anywhere.

4. Move from free AI to professional deployment

Free generative AI can be useful for practice, but it is not a sustainable basis for legal work.

• Determine which tasks you want to use AI for: consider legal research, first drafts of documents, summaries of case files, or structuring information.
• Distinguish between experiments and production: for trial assignments, you can play with free tools; for actual client work, you need secure, legally sound solutions.
• Record which applications your firm uses, why, under what conditions, and with what rules for sources, privacy, and confidentiality.

In this way, AI becomes a permanent assistant in your work, rather than a separate toy alongside your practice.

5. Connect technology to a better client experience

Do not use technology only to save time internally, but primarily to make your services clearer and more predictable for clients.

• Set up a fixed digital starting point: an online intake, a clear step-by-step plan, and a client portal where documents and progress come together.
• Make concrete agreements about accessibility and response times and use systems to fulfill those agreements.
• Translate your investments in technology into concrete benefits for clients: faster clarity, better case building, predictable pricing.

When clients experience that your firm works quickly, carefully, and transparently, space naturally arises to speak about value instead of hourly rates.

In Conclusion: Small Practice, Big Advantage

The 2026 Benchmark Report paints a clear picture. On one side are small and medium-sized firms that are getting their processes in order, investing in technology, and achieving high percentages of billable hours. On the other side, you primarily see sole practitioners struggling with non-billable work, investing little in LegalTech, and lagging behind in the digitalization push.

That is precisely where the opportunity lies for small Dutch law firms. While larger firms need time to get everyone on board, you can pivot rapidly in a small organization. Decide today, test tomorrow, adjust next week.

The common thread is clear: those who use technology and AI to work smarter gain time, margin, and quality. The question is no longer whether you take that step, but when. The best day to start was yesterday. The second best day is today.