May 28, 2025
We have recently had a number of off the record and on the record conversations with buyers and sellers, which have resulted in some quite illuminating bits of advice & information.
I hope this information is useful!
“in the legal sector as a whole there has been a huge change in the market. Most large corporate/commercial law firms are now private equity backed. Private equity investors have started to move into other fields, for example family.”
“Private equity investors are looking to buy & build. They generally have a plan to keep a business for 5 years and then sell it for 2-3 times the price paid for it.”
“New ‘corporatised’ platforms are outgrowing the legal market. They usually have three times as fast growth as conventional law firms.”
“Deal volume is driven by law firms still. The vast majority, over 70%, are acquisitions by law firms.”
“Unlocking value is what buyers are looking for. Increased opportunities, investment in technology and growing the staff team.”
“We are not interested in the staff team. On a medium sized acquisition we recently completed on, our firm immediately lost over 80% of the staff within 6 months. We see the staff team as a risk.”
“We see value in the staff team in law firms. It is so hard to recruit lawyers and we always try to tie key staff into any deal for as long as possible to ensure consistency.”
“Most small law firms with retiring partners have extremely little value to us, if any at all. Our ethos is that we are offering a benefit to retiring partners – we give them freedom and remove the risk that just one claim can have on their retirement plans.”
“Old fashioned law firms are fascinating to look round, but they cause all kinds of problems for acquisition that are so easily avoided if the owners embraced technology and actually used it.”
“Our company is interested primarily in will banks. We generate work from these into our own business but also use it to drive business elsewhere in the company.”
“Generally we see more law firms than accountancy practices doing deals in the SME sector.”
“There is a lot of talk about AI in the legal sector, but at present only 20% of law firms have managed to get something into practice and only 2% have managed to monetise it. No-one yet knows how to make money out of AI in the legal sector.”
“The legal sector is a huge & resilient market. At present though, corporate law firms and personal injury law firms are struggling and therefore looking to consolidate their operations.”
“I got fed up dealing with buyers who do not know what the regulatory requirements are to buy my business. Does it really take that much effort to do some research in a market before you try and enter it through acquisition?”
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