• Michael Burne

Investment Opportunities for Private Equity Firms in the Legal Sector

What do Private Equity Firms do?

For years, private equity firms have controlled the pecking order of businesses across various industries, from manufacturing to healthcare. Selecting their investments wisely, private equity firms can efficiently generate high returns for investors, by buying companies, helping them to grow and then selling them for a profit. By operating on this buy-to-sell strategy, they have the ability to determine which companies will be next to grow in size and value. With this tried-and-tested way of delivering high rates of return, private equity firms show no sign of slowing down any time soon.

Yet, as private equity firms continue to strike gold in the manufacturing, software and technology industries, one sector continues to fly under their radar, despite its huge investment opportunities.

What investment opportunities are there in the Legal Market?

The legal market could be the ideal place for private equity firms to make their next big investment. Currently, there are over 10,000 SRA-regulated law firms operating in the UK, presenting private equity firms with plenty of investment opportunities. What makes the legal industry even better, is its suitability and readiness for mergers and acquisitions to be carried out.

For private equity firms, mergers and acquisitions can be a key part of their buy-to-sell strategy. When two companies come together, there is an increase in staff, skills and knowledge, putting them in the perfect position for private equity firms to implement rapid performance improvements.

In the legal market, mergers and acquisitions are a common occurrence, and according to a recent article in The Law Society, there are currently more firms looking to grow by acquisition than there has been in 20 years. This is particularly apparent in small and mid-tier firms, where the process of merging presents an opportunity to grow and establish themselves within an already crowded market. With law firms actively searching for merger and acquisition opportunities, the legal market reflects the ideal environment for private equity firms to invest, which could even lead to them consolidating the market.

How can Private Equity Firms invest in the Legal Market?

With law firms ripe for investment, all that private equity firms need is an effective way to carry out mergers and acquisitions. After all, merging two law firms can raise a number of issues and can be a much more challenging process than it first appears. From choosing an IT system to aligning company cultures, private equity firms might just have their work cut out for them if they attempt to invest in the legal market alone.

Luckily, there’s now an easier way for mergers and acquisitions to be carried out between law firms, ready for private equity firms to use.

The Bamboo Platform is a law firm operating system, designed to streamline the setup and operation of new law firms. By providing everything that’s needed to merge two firms, including the regulation, insurance and a supported IT system, Bamboo makes mergers and acquisitions much easier to carry out, saving private equity firms both time and money. What’s more is, once a private equity firm decides it’s time to sell, they can look for a buyer on the Bamboo Platform, in addition to all of the usual exit routes where all firms use the same systems and software. In essence, Bamboo becomes a marketplace as well as a platform.

With a simple entrance and a smooth exit, Bamboo is the place to be for private equity firms interested in entering the legal market through mergers and acquisitions and to drive a consolidation play. So, if you’re part of a private equity firm that’s looking for a breakthrough investment opportunity, why not consider the acquisition of law firms and contact Bamboo when you’re ready to invest.

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