Private equity has successfully made its mark on a host of American industries, including some professional services businesses, and the law firm world is an enticing next target, even with rules of professional conduct for attorneys that serve as a stiff barrier for entry.
In all but two U.S. states, nonlawyers are generally prohibited from having an ownership stake in law firms. This has served as a hurdle for PE firms who eye the law firm business as a potential cash cow. But that doesn’t mean that private equity has abandoned a desire to invest in legal businesses stateside. On the contrary, PE appears more interested than ever in investing in the law firm industry, which recently has seen an explosion in profitability.
