Law firms face growing pressure to balance cost, culture and competitiveness, reveals new Howden and People in Law research
Rising costs, evolving employee expectations and a highly competitive talent market are reshaping the employee benefits landscape in the UK’s legal sector, according to new research from Howden Employee Benefits, in partnership with People in Law.
The Employee Benefits in the Legal Sector 2025/26 report, based on responses from HR and Reward professionals across 76 law firms of all sizes, highlights a sector working hard to manage rising costs while still putting its people first.
While cost management now ranks as the number one challenge, most firms are still planning to invest with two-thirds (67%) saying they will expand their benefits within the next two years.
A profession under pressure, but still investing in its people
The research shows that law firms continue to offer generous core benefits, including:
- Pensions: 93% of firms pay above statutory minimum contributions.
- Private Medical Insurance (PMI): Offered by 96% of firms
- Income Protection: Offered by 90% of firms, typically covering 75% of salary.
- Life Assurance: Provided by 98% of firms, with an average cover of just below 4 × salary.
However, many firms are now reviewing how these benefits are structured and funded. Rising healthcare costs, ongoing NHS delays and escalating premiums are prompting renewed scrutiny of family cover, optional top-ups and wellbeing investments.
Despite this, the report finds strong evidence of a sector committed to supporting its people and culture. A growing number of firms are looking to deliver more value through financial wellbeing initiatives, flexible benefits and clearer communication.
Data-led decisions replacing traditional approaches
The study highlights a clear shift towards evidence-based decision-making, with HR and Reward leaders using benchmarking, employee feedback and benefits utilisation data to shape benefit strategies. This marks a move away from simply expanding benefit lists towards designing programmes that genuinely improve engagement, retention and wellbeing.
James Clowser, Client Director, Legal Sector Consulting at Howden Employee Benefits, said:
“The legal profession is built on its talented people but people’s needs and expectations are evolving fast. Firms are under pressure to deliver more impact from every pound spent, and that’s driving a smarter, more insight-led approach to benefit design.
The firms that will thrive are those that use data to understand what matters most to their people, invest where it strengthens culture, and communicate clearly. It’s about making sure people have the support they need to stay healthy, engaged and confident in their careers”.
Flexibility and family leave: a work in progress
While flexibility remains a priority across the profession, the report reveals that only 20% of firms currently offer flexible benefits.
Progress is being made in family-friendly policies. The number of firms now offering enhanced paternity leave has significantly increased, reflecting a growing awareness of shared parental responsibilities and highlights the need for more holistic family support across the sector.
The data also shows distinct differences by firm size and region. Large London firms are leading on innovation and flexible working, while smaller and regional firms are focusing on strengthening core benefits such as pensions, protection and healthcare.
Wellbeing support broadens but impact varies
The majority of firms now offer a wide range of wellbeing support, including Employee Assistance Programmes (EAPs) and virtual GP access, both available at over 90% of firms. Support for menopause and neurodiversity is expanding, particularly among larger London practices, yet financial wellbeing remains underdeveloped — with 67% of firms offering no specific financial wellbeing support at all.
Fiona Wilson, Senior Manager at People in Law, commented: “It’s encouraging to see firms broadening their wellbeing offer, but it’s not just about variety — it’s about relevance. The most effective programmes are built on listening to employees and shaping support that genuinely fits their needs.
Our members are passionate about creating positive, inclusive workplace cultures, and this research gives them the data and confidence to keep moving forward.”
Looking ahead
The 2025/26 report builds on Howden and People in Law’s inaugural 2023 study, offering a valuable longer-term view of how benefit strategies are evolving across the sector. As firms continue to adapt to changing workforce expectations, the message from Howden is clear: benefits that reflect culture, wellbeing and modern working life will be key to staying competitive.
James Clowser added: “The strongest firms will be those that look ahead by making evidence-based decisions and invest where it counts. Those that combine data, insight and clear purpose will stand out in the legal market. Benefits are a clear reflection of how a firm values its people and builds its culture.”
The Employee Benefits in the Legal Sector 2025/26 report is available to download at: https://www.howdengroup.com/uk-en/employee-benefits-for-the-legal-sector
