Across private equity, M&A, technology and capital markets, momentum is building, deal complexity is increasing. So, while 2025 provided many twists and turns, lawyers expect this to intensify into 2026. Private capital will continue to lead firm decision-making while increasing European deal activity is giving hope to lawyers across the City. Here's, top partners give their view on what to expect in 2026. Private Equity Firepower One of the clearest themes for 2026 is the continued prominence of corporate carve-outs. Tom Evans, global vice chair of Latham & Watkins’ corporate department, expects these transactions to remain front and centre as strategic priorities sharpen. “As corporates sharpen their focus on core businesses, a growing number of non-core but highly attractive assets are being brought to market," Evans told Law.com. "Private equity has a strong track record of acquiring these assets, refocusing management, aligning incentives, and unlocking significant value—and we expect this momentum to carry strongly into 2026.” That supply of assets is meeting a buyer base that remains well capitalised, but increasingly disciplined. Catherine Detalle, corporate M&A partner and head of consumer sector at Eversheds Sutherland, notes that valuation dynamics have shifted materially. “Across the market, we’re seeing longer price negotiations as valuation multiples contract and financing costs stay elevated,” she says. “That widens the gap between sellers’ expectations and buyers’ capacity—a gap that takes longer to bridge and increasingly impacts contractual deal terms.” Mega-Deals, Sustained Confidence Simpson Thacher & Bartlett co-head of M&A James Howe says that “European deal activity strengthened notably through the second half of 2025, with large cap and mid-market transactions rebounding as assets that had been held back earlier in the year finally came to market.” Similarly, Sam Newhouse, global vice-chair of M&A and private equity at Latham & Watkins, points to a record year for blockbuster transactions as a foundation for continued confidence. “There’s little sign the market will slow down in 2026,” he says. “Off the back of what has been a record year for mega-deals…companies and sponsors will continue to take advantage of favourable market conditions to pursue big moves in 2026.” That confidence is being reinforced by improvements in capital markets. Simpson Thacher’s other co-head of European M&A Geoff Bailhache highlights that “despite ongoing macroeconomic challenges, an improving IPO market in both the U.S. and Europe has provided an important tailwind, reinforcing confidence and helping to stimulate M&A activity.” Linklaters’ James Wooton echoes this, describing “a sense of cautious optimism,”, and noting that, while the U.K. IPO market has been “more closed than usual,” it is now clearly emerging from that phase. A meaningful autumn pipeline, combined with European transactions such as Verisure and Shawbrook, points to a “constructive pipeline into 2026". For private equity sponsors in particular, healthier exit routes are feeding back into new deployment decisions. Uneven Sector Momentum

Sector resilience, however, is far from uniform. Detalle observes that “deal momentum is mixed: retail is slower versus 2025, while energy, defence, tech and life sciences remain resilient and active". Those resilient sectors align closely with longer-term structural trends. Newhouse points to digital infrastructure in particular: “The explosion of AI drove data centre and digital infrastructure dealmaking to record highs in 2025. As demand for connectivity, cloud services, and digital transformation continues to accelerate, these sectors will continue to be among the hottest areas.” Jeremy Walden, executive partner for U.K. and EMEA at Herbert Smith Freehills Kramer, adds that private capital clients are doubling down on “real assets, energy, data-driven infrastructure and the defence sector,” driven by geopolitical complexity and the need for diversification across regions. Regulatory Drag and buyer control Where 2026 is likely to feel different from prior cycles is in regulatory intensity and deal control. Detalle points to “stricter screening of foreign investment and broader competition clearance requirements” that are “lengthening the path from signing to closing and sharpening debates around how regulatory risk is shared.” That is reshaping deal dynamics. “Buyers have decisively regained control. They set the pace, intensify audits and plan integration before signing,” she says. In this environment, provisions once treated as boilerplate have become strategic. “‘Long-stop’ dates and MAC provisions are once again critical. Calibrated poorly, they invite late-stage renegotiation.” Cross-border transactions, in particular, are becoming more complex, with sophisticated acquisition structures and management packages attracting closer scrutiny from sellers and employee representative bodies alike. Meanwhile, as regulatory processes become more complex, so do the capabilities of AI. But while AI is reshaping deal processes, Walden cautions against overestimating the technology itself. “AI is rapidly becoming embedded in many aspects of legal work,” he says. “However, the firms that will lead are those that stay human-led and relationship driven. The real differentiator in 2026 won’t be the tools themselves, but the mindset of the people using them.” Global Reach The Way Forward? In a year that has seen a striking number of transatlantic and cross-border mergers—the future of the law firm seems global. As transactions grow larger and more complex, advisers argue that firm selection is becoming more consequential. Ed Barnett, managing partner of Latham’s London office, believes scale and integration are now decisive. “Deals are getting bigger and more complex, and clients are really counting on their law firms to bring in true experts in every major jurisdiction,” he says. Using data centres as an example, Barnett points to the need for expertise spanning real estate, energy regulation, M&A, private capital, project development, finance and disputes. “Not many can genuinely say they offer these top-tier services in key global markets.” Walden makes a similar point from a client-centric perspective, observing that capital is flowing “through established and emerging investment corridors linking the U.S., Europe, Asia, the Middle East and Africa,” and that “the firms that can accompany their clients on their global journeys will thrive in this environment.” London’s Revival

London, Wooton argues, has “woken up to the fact that it is competing in a global market,” with significant changes to prospectus and delisting rules levelling the playing field. Coupled with seeming political stability and the continued appeal of English law, this has renewed confidence in London being able to compete effectively with European peers. With capital available, exits reopening and structural growth sectors driving activity, the challenge for advisers will be less about finding work and more about proving they have the depth, judgment and global capability to deliver for clients.