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⚖️ Why a private equity firm is suing the lawyers it bought from (and how £873k became £4.6 million)
Idin Sabahipour
July 29, 2026
Contents
If you take just one thing from this email...
Lawfront, a private-equity-backed group that's been buying up regional UK law firms, is suing five law firm partners who sold it the Manchester firm Slater Heelis in 2024. It claims the firm's accounts included £873,000 of income it was never actually going to receive.
Lawfront is relying on a warranty (a promise in the sale contract) that the accounts were accurate – so damages are measured by how much the false figures inflated the firm's value, not by the missing money itself.
Because buyers price a business at a multiple of its profits, the £873,000 of doubtful income has turned into a claim of up to £4.6 million.
EDITOR’S RAMBLE 🗣
If you didn't convert your vac scheme, read this.
Vac scheme season is finishing now, and TC offer news is landing. Some of you will have got the offer – congratulations (that’s awesome).
Some of you won’t have converted – and you’re thinking:
→ "Was it all for nothing?"
→ "Can I do another cycle of this?"
→ "Will an unconverted scheme look bad on future applications?"
I’ll deal with that last point first – no. An unconverted scheme is still a positive. You beat thousands of applicants to get this. You spent a week inside a firm, working on real matters alongside real lawyers.
If you didn’t manage to convert your VS, here’s exactly what to do now.
Today, write everything down while it's fresh. Open a document and make a note of:
The teams you sat in
Every task you did ("proofread a disclosure letter", "researched a point for a client note")
Every deal or matter you were involved with (even just the sector and deal type) – nothing confidential, though
The name of every lawyer you spoke to, and one thing each told you
Applications open again in a couple months, and this doc will help you write better applications. Instead of writing "I think I will be suited to a commercial firm", you’ll write "At [firm], I spent a week in the corporate team. During that time I learned [x], which appealed to me because ..." That alone puts you in the top 10% of applicants.
This week, do these things.
1. Email the recruitment team for feedback. "Thank you again for the scheme. Could you share where I fell short – my written tasks, interviews, or feedback from my supervisor? I want to know what to work on before next cycle."
When the feedback comes, don't argue back, even if you think they're wrong. Because even if they flag a weakness in something you're actually good at, that means you failed to show it. Either way, you've got something to work on.
2. Check the firm's reapplication policy. Some firms will still welcome your application back next cycle, but others make you wait a year (or don’t let you reapply). Send a short email to grad rec to ask about this.
This month, rebuild your self-image.
Right now your whole identity is pinned to one outcome – getting a training contract. That's why this hurts so much, and it's why people quit. But – let me tell you – there's a lot more to you than this application cycle.
Take 2 minutes and write down:
One thing you're good at
One challenge you've overcome
One time you helped someone else
None of your answers should be law related. I know this feels silly (and most of you won’t actually write it) but try it. Because it forces you to see how impressive you are as a person (without a TC). People who feel worthless stop applying – this stops that.
Take a proper break before September. For the next few weeks, don’t do anything that’s related to law. You'll have a lot more energy afterwards.
Keep going. You’re closer than you think.
– Idin
FEATURED REPORT 📰
⚖️ Why a private equity firm is suing the lawyers it bought from (and how £873k became £4.6 million)
What’s going on here?
Lawfront is a private-equity-backed group that has been acquiring regional UK law firms. It’s suing five of the partners who sold it Slater Heelis, a Manchester-headquartered firm it bought in 2024. Three of the partners still work at the firm today.
Lawfront says the partners broke contractual promises that the firm’s accounts were accurate – and it claims it lost up to £4.6 million as a result.
How could a private equity group buy a law firm?
Two things had to happen before Lawfront could buy Slater Heelis.
⚖️ The law had to change so that non-lawyers could own law firms. Before 2007, a solicitors’ firm generally had to be owned and managed by solicitors. Part 5 of the Legal Services Act 2007 changed the rules. It created the alternative business structure, or ABS – a law firm that can be owned partly or entirely by non-lawyers. Slater Heelis has an ABS licence – which made the Lawfront deal possible. We previously covered how non-lawyers (for example, a US software company) could buy UK law firms – and which other countries allow this.
🏢 Slater Heelis changed its legal structure so that it could be sold more easily. Until 2021, Slater Heelis was a limited liability partnership, or LLP, which is how many UK law firms are organised. An LLP is owned by its partners (called members). Unlike a normal company, it has no shares. That makes it harder to buy – a buyer would normally have to become a member while the existing partners leave, often with everyone’s agreement. In 2021, Slater Heelis moved its business from an LLP into a limited company, or Ltd. A limited company is divided into shares, and whoever owns those shares owns the business. This made the firm much easier to sell – in 2024, Lawfront bought 100% of Slater Heelis’s shares.
Lawfront is backed by the private equity investor Blixt, and Slater Heelis is one of more than a dozen firms it has bought since 2021 as part of a strategy called a roll-up.
🤔 What’s a roll-up?
Private equity firms collect money from investors, buy businesses, improve them, and later sell them for a profit.
A roll-up is one way of doing this. Instead of buying one large company, the investor buys lots of smaller businesses in the same industry and brings them together under one group. The main idea is to save money – a group that owns a dozen firms can share IT, marketing, finance and compliance costs.
From the client’s point of view, not much may appear to change – each firm keeps its own name, office and lawyers, as Slater Heelis has done. Law firms suit this strategy because the market is very spread out. There are around 9,000 firms in England and Wales, most relatively small – plenty for investors to buy and combine.
Lawfront shows how quickly this can grow. Its revenue tripled to £47 million in the year to March 2024, and in 2025 it spent another £70 million buying firms.
What was wrong with Slater Heelis’s accounts?
Lawfront’s argument is that Slater Heelis’s accounts made the firm look more valuable than it really was, so Lawfront paid too much when it bought the business.
The issue is over two types of income which you’ll find in a law firm’s accounts:
What appeared in the accounts | What it means | When it’s actually valuable |
|---|---|---|
Unpaid bills | Work has been completed and the client has been sent a bill, but hasn’t paid it yet | If the firm is legally entitled to charge the fee and is likely to collect it |
Work in progress | Lawyers have completed and recorded work, but the client hasn’t yet been billed | If the firm will eventually be allowed to bill the client and collect the money |
The dispute concerns Slater Heelis’s Court of Protection work. This involves helping people who can’t manage their own financial affairs. Because these clients may be vulnerable, there are limits on the fees lawyers can charge them.
At the time, clients with under £16,000 in assets could generally be charged no more than around £720 a year.
After the purchase, Lawfront reviewed the files. They showed that large amounts of fees had been recorded for clients with under £16,000 in assets – far more than it could legally charge those fee-capped clients for.
So Lawfront’s disputing two amounts:
£603,000 in unpaid bills: It argued that the clients had been billed, but the money could not realistically be collected.
£270,000 in work in progress (WIP): It said that this work had been recorded, but couldn’t legally be billed at the normal rate.
So the accounts allegedly included £873,000 the firm couldn’t properly bill or collect.
What promise did that break?
When someone buys a company, they usually buy its shares, taking ownership of the whole business, its assets, debts and any problems that appear after the sale.
Imagine buying the shares of a café company: you get its shops, staff and equipment, but also its unpaid bills or faulty equipment you didn’t know about.
The seller knows far more about the business than the buyer, so the buyer needs to put promises and protections into the sale contract.
That contract is called a share purchase agreement, or SPA. It sets out the price, how the sale will work and who pays if information about the business turns out to be wrong.
Lawyers have two main tools for capturing these risks in the SPA.
Tool | What the seller promises | What happens if the promise is broken |
|---|---|---|
Warranty | That a fact about the business is true. | The buyer can claim damages – it must show the false information made the business worth less than it appeared, and claim the difference in value. |
Indemnity | To pay for a specific problem, usually one both sides already know about. | The buyer shows the problem happened and what it cost – the seller pays that amount back, usually pound for pound (no business-valuation exercise needed). |
Here, Lawfront is relying on a warranty, not an indemnity.
In the SPA, the former partners promised that Slater Heelis’s accounts were accurate and gave a “true and fair view” of the firm’s finances.
Because Lawfront is relying on a warranty, it can’t simply ask for the disputed £873,000 to be repaid.
Warranty damages are based on what the shares would have been worth if the accounts had been accurate, versus what they were actually worth. Lawfront says that gap is up to £4.6 million.
🤔 How does £873,000 become £4.6 million?
When you buy a business, you pay upfront for the profits you expect it to make over several years. That’s why businesses are often valued using a profit multiple. For example, if a firm makes £1 million a year and is valued at five times its profit, the buyer pays £5 million.
The same logic works in reverse. If £1 of reported profit turns out not to be real, a buyer using a five-times multiple may argue that it overpaid by £5. Lawfront says the disputed £873,000 made Slater Heelis look more profitable than it really was – and because the price was based on that profit figure, the effect was multiplied.
Using a multiple of just over five, £873,000 becomes an alleged overpayment of up to £4.6 million.
Why are the partners personally liable?
Lawfront didn’t take warranties from every Slater Heelis shareholder – only from the five senior partners who ran the firm (the managing partner and four heads of department).
Those five signed the warranties personally (becoming the “warrantors”), promising the information given to Lawfront was accurate. So, if those promises were false, Lawfront can sue them directly – which is exactly what it's doing, even though three of the five still work at the firm.
🤔 Why continue working at the firm you sold?
The partners weren’t paid the full sale price on the day of the sale.
Lawfront paid the sellers:
→ £12.2 million in cash immediately
→ £2.9 million as a stake in the wider Lawfront group
→ £2.6 million in payments spread over five years
This likely gave the former owners a reason to stay – if the wider group performs well, the shares and later payments may be worth more.
That matters because a law firm’s value depends heavily on its lawyers and their relationships with clients. If the senior partners left immediately after the sale, clients and staff might leave with them.
Which law firms are involved?
Pinsent Masons is advising Lawfront on the claim. The five partners are represented by Eleven Law.
How can you use this in your applications?
Here are some ways you can use this story in your law firm applications.
Insight | How to use it in your applications |
|---|---|
Private equity is buying up small UK law firms | In an application process, if you get asked about the future of the UK legal profession, point to private equity moving into the smaller end of the market. Roll-ups like Lawfront (whose revenue tripled to £47 million in a year) are buying up regional and high-street firms. Bigger law firms aren’t as likely to be acquired by PE firms. Firstly, their partners have no incentive to sell (the firm funds itself, so taking investment just means handing an outside owner a slice of the profits). Secondly, many couldn't sell even if they wanted to – US bar rules ban non-lawyer ownership, so any firm with American offices is off-limits. But there are some (rare) exceptions – DWF was bought by private equity house Inflexion in 2023. That firm was only sellable because it had already abandoned the partnership model and listed on the stock market. |
Not every hour recorded becomes an hour billed | Slater Heelis's accounts included £270,000 of work in progress – recorded time the firm couldn't bill, because legal fee caps applied to those clients. But recorded time goes unbilled at every firm, usually by choice (partners review the hours before billing and write off what the client shouldn't pay for – including a trainee's extra time on a task). Use this in situational judgement questions. If asked whether to record all eight hours you spent on a three-hour task, say yes. Recording and billing are separate steps – partners review the time and write off what the client shouldn't pay for, and absorbing a trainee's extra hours is a deliberate investment in training. Under-recording is worse – it hides that you might need support and gives the firm false data on how long work really takes. Show that you understand the difference between time recorded and time billed (it will set you apart). |
Warranties and indemnities are tools in a corporate lawyer’s toolbox | A warranty promises a fact about the business is true – if false, the buyer can prove the business was worth less than it appeared and claim the difference. An indemnity promises to repay a specific cost, pound for pound. In a case study where your client is buying a company, suggest a warranty for risks you cannot see – accounts that might overstate profits, as Slater Heelis’s allegedly did. Suggest indemnities for risks you can see – like an ongoing HMRC dispute that could cost £2 million, so the seller repays the tax bill directly if it lands. |
IN OTHER NEWS 🗞
📺 The competition regulator is taking a first look at Sky's £1.6 billion takeover of ITV's broadcasting arm. The Competition and Markets Authority is inviting comments on the deal before its formal investigation begins. The battle will be over how the ad market is measured. The combined company would control around 70% of TV advertising, but only 20% of UK advertising overall – this is the measure Sky and ITV want regulators to use.
💊 Bain Capital is buying Vitabiotics at a reported $1.2 billion valuation. The British vitamin company behind Wellman, Wellwoman and Perfectil is led by Tej Lalvani, a former Dragons' Den investor. The deal captures Vitabiotics's UK business plus its operations in India and Africa, with Bain planning to push the brands further into markets like the Middle East and China. Kirkland advised Bain, with Macfarlanes acting for the selling shareholder.
✈️ easyJet's £5.7 billion takeover has hit a road bump in Brussels. Reports that the EU is preparing a review of its airline ownership rules sent easyJet's shares down 14%. EU law says carriers flying within Europe must be majority-owned by Europeans. That's a problem for Apollo, the US investment giant buying the airline – it hasn't yet said how it would comply. Two weeks ago, in our newsletter on the takeover, we flagged this exact ownership rule as the deal's biggest hurdle.
OPEN TABS 🌐
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