Together with

Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH MORNING BREW* 🤝

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

On Monday, Laura (our writer) and I were discussing newsletter topics for this week.

We started speaking about a law firm application question that comes up often:

With this question, there's always that "obvious" answer:

• Back in 2008-2012, everyone wrote about the global financial crisis

• From 2013-2018 (when I was applying), it was Brexit

• These days, it's all about generative AI

But here's the thing — I think writing about something less “obvious” could help you stand out.

Think about it: the recruitment team is slogging through thousands of applications.

By the time they've read 200 answers on GenAI, they'd be excited to read about literally anything else!

Plus, picking something different shows you've got the confidence to trust your own judgement instead of playing it safe.

Since we're in the thick of application season right now, here's what you should do if faced with a question like this:

1. Get your laptop out

2. Head over to littlelaw.co.uk (I might be a biased)

3. Find a story that actually interests you (extra points for steering clear of AI)

4. Use that for your application

Actually, today's newsletter topic could even be good for this — it's got big implications for law firms, and no AI at all.

Good luck 🤞

- Idin

P.S. We covered the top 5 legal trends of 2025 (plus how you can use each of them in your applications).

FEATURED REPORT 📰

💰 Why private equity loves the legal sector

What’s going on here?

Private equity houses are starting to buy law firms.

The legal sector is appealing to them because it’s highly profitable. Last financial year, the top 100 UK law firms earned £37 billion in revenue.

Globally, the estimated annual revenue of legal services is thought to be £800 billion.

Can private equity companies own law firms?

It depends on where the law firm is based (the rules differ by region).

In December 2024, the European Court of Justice decided that EU countries can choose to ban financial investors from owning part or all of a law firm. Some countries, like Germany, Austria, and France, say law firms can only be owned by lawyers.

In most US states, it’s the same — non-lawyers can’t own law firms.

But the UK, Australia, and the US states of Utah and Arizona allow a different model.

In these places, companies offering legal services can register as Alternative Legal Service Providers (ALSPs). This is how the Big Four accountancy firms (EY, KPMG, PwC, and Deloitte) offer legal advice. That means non-lawyers (like private equity companies) can invest in, partner with, or lead ALSPs.

How do private equity firms make money from acquiring law firms?

Private equity makes money by buying a majority stake (50% or more) in chosen companies.

To do this, private equity firms raise money from investors (called limited partners). They pool this money into a fund and, once they hit their target amount, they close the fund and start investing in companies.

The goal is to grow the fund’s value, which they do by improving the company’s operations, cutting costs, and increasing revenue.

Before the company’s sold, profits are shared with the limited partners. Eventually (after 3-5 years), they want to sell their stake at a higher value to make a profit.

In the legal industry, private equity owners have been encouraging firms to grow through acquisitions of smaller law firms.

Lawfront (a regional law firm group) was bought by the private equity firm Blixt Group. Blixt then helped it acquire more law firms over the last two years (like Essex-based FJG as well as Farleys, a firm based in the North West and East Midlands). This strategy helped increase Lawfront’s annual revenues to over £45 million.

Are there other major examples?

In August 2023, UK law firm DWF delisted from the London Stock Exchange and was bought by private equity firm Inflexion for £342 million.

In July 2024, Alia Capital Partners bought a stake in Spanish law firm ECIJA. The investment helped ECIJA improve its technology, open new offices in Spain and abroad, and hire 20 new partners.

Later in 2024, Horizon Capital invested £20 million for a majority stake in Adeptio Law Group, from the West Midlands. It also acquired regional firm FBC Manby Bowdler as part of its plan to create a national legal services group.

Why does private equity find the legal sector attractive?

💷 High profit margins: Most well-run law firms have profit margins of around 30%. This is much higher than what many non-legal businesses achieve.

💪 Resilience in any economy: Law firms can thrive in both good and bad economic times. A private equity executive called them "eternally-profitable businesses."

During economic booms, they handle lots of mergers and acquisitions. In recessions, demand shifts to restructuring services. This gives investors confidence that money will keep coming in, even during uncertain economic times.

Why should law firms care?

Private equity investment in law firms is expected to continue, especially in the mid-market. Since private equity firms add value by helping law firms buy other firms, this will likely lead to more consolidation. The result? Fewer, but larger, law firm groups.

For now, the biggest global law firms (Magic Circle, Silver Circle, or AmLaw 25) are unlikely to attract private equity buyers.

Here’s why.

📋 Bureaucracy (and history): UK firms would need to register as an Alternative Legal Service Provider with the Solicitors Regulation Authority, which long-established traditional firms are unlikely to do. US firms would need to change their jurisdiction to Arizona or Utah and register there. These changes involve a lot of administrative work, and a major shift from their existing identity, which can be a deterrent.

💰 Profit distribution: Most law firms distribute their profits to partners yearly, leaving little for reinvestment. If a private equity firm takes a share of these profits, it means less is available for the partners. This could make it harder to attract and keep top legal talent.

🤝 Control and decision-making: Private equity ownership requires giving investors a say in key decisions. Many partners may be unwilling to lose control over the firm’s direction to a private equity firm that lacks experience in law firm operations.

That said, firms are likely watching the performance of early movers like DWF in the UK and ECIJA in Spain.

If these private equity-backed firms can grow revenue and profits while fairly compensating partners, attracting top talent, and keeping partners central to decision-making, we might see more follow this trend.

TOGETHER WITH MORNING BREW* 🤝

This isn’t traditional business news

Welcome to Morning Brew—the free newsletter designed to keep you in the know on the business news impacting your career, company, and life—in a way you didn’t know you needed.

Note: this isn’t traditional business news. Morning Brew’s approach cuts through the noise and bore of classic business media, opting for short writeups, witty jokes, and above all—presenting the facts.

Save time, actually enjoy business news, and join over 4 million professionals reading daily.

Check it out

* This is sponsored content

IN OTHER NEWS 🗞

• 💼 The US firm Milbank is offering a new leveraged finance training contract. Unlike a regular training contract, this is for people just passionate about “LevFin”. Trainees spend 12-18 months in the London LevFin team, plus at least one seat in a different practice area. It’s the first of its kind in London, showing Milbank’s focus on handling big finance deals (get more info).

• 🇳🇱 Morrison Foerster (the US law firm) is opening an office in Amsterdam. This will be its 18th office (and 4th in Europe), led by Alex van der Wolk, co-chair of their top-tier Global Privacy & Data Security practice. The goal is to strengthen ties with global clients in Europe (especially in tech, life sciences, and AI).

• ⚖️ The family of late Leicester City chairman Vichai Srivaddhanaprabha is suing helicopter maker Leonardo SpA for £2 billion. This comes after the tragic 2018 crash outside King Power Stadium that killed Mr Srivaddhanaprabha and four others. It’s the largest fatal accident claim in English history, based on his potential lifetime earnings, as King Power (a Thai retail business owned by Srivaddhanaprabha) was making over £2.5 billion a year. Stewarts Law is representing the family, while DAC Beachcroft is acting for Leicester City.

AROUND THE WEB 🌐

• 🐾 Fun: Guess the Pokémon by its silhouette

• 🚫 Sickdays: An Italian town’s mayor has banned getting sick because of limited healthcare

• 👡 Statement piece: A British-Nigerian artist has created the world’s largest sandal measuring 3m tall 👇️ 

  

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.