Have your say on external finance for law firms
Robert Blech · Posted on: November 6th 2025 · read
In January this year, we came together with the Law Society to publish a report based on a survey carried out entitled “strategic sector insights” for law firms. This was aimed at the mid-tier market and was developed as more than a financial projection of the next 12 months, but how practices were looking to prioritise and enhance their resources which may be available for them. The purpose of targeting the mid-tier law firms was to gain a deeper understanding of their needs, which are often diluted in surveys - due to the high proportion of smaller organisations.
The key word which came through a high number of responses was “growth” and expanding the market share which firms currently enjoyed. The type of growth being considered was split between organic and via a merger or acquisition.
This report is being replicating to be released in January 2026, and the link to participate in it is at the bottom of the article. It will remain open for a short time before the data is collated, and the report written based on the results.
If a competitor uses external finance to invest in acquisitions or technology, others may feel they have to do likewise in order to maintain their market position. This may in turn lead to a rapid increase in differing investment models of law firms, although we are not at that stage yet.
Robert Blech, Partner
From our recent conversations with mid-tier firms whilst working on this year’s survey, the look for growth has led to further conversations about how this will be funded. A perhaps surprising response to last years survey was a lack of appetite for senior staff to progress to partnership. This means that the traditional equity model to fund businesses is changing and firms are looking at alternative ways to raise capital.
This is highlighted by some of our questions in this year’s survey which include those surrounding private equity (PE). We have asked if firms have been approached by a PE investor wanting to purchase their business during the last 12 months, and whether they would consider selling to private equity as an option for the future of their business.
The survey also delves deeper into what funds raised for PE would be used for. This is to see if its use would solely be for acquisitions or for other reasons such as allowing investment in IT or AI technology, as well as looking ahead to partners exit strategy.
The purpose of targeting the mid-tier law firms was to gain a deeper understanding of their needs, which are often diluted in surveys - due to the high proportion of smaller organisations.
Robert Blech, Partner
However, a decision to use PE funding must consider the possible negative implications it may bring to the partners and the firm. There will inevitably be some loss of control for the current management and there is a possibility of an adverse cultural change within the organisation which needs to be thought about.
Apart from PE, there is also the possibility of an Initial Public Offering (IPO) of the firm which raises capital by listing the entity on a stock exchange. Again, the effects on the internal makeup of the firm need to be taken into account, but these are discussions which are becoming much more frequent in larger law firms.
If a competitor uses external finance to invest in acquisitions or technology, others may feel they have to do likewise in order to maintain their market position. This may in turn lead to a rapid increase in differing investment models of law firms, although we are not at that stage yet. Larger accountancy practices have had more appetite for external funding options, and we will have to see if law firms follow suit.
Our expert's final thoughts
"Every individual firm has their own motives and strategies and will follow the path they believe achieves these best. We would welcome all firms with over 8 partners, members or directors to complete our survey. If nothing else, it will give you an insight into what like sized practices are aiming to achieve in next year."
