Private equity's legal land grab: David Morley on why investor interest is soaring

Everyone is talking about private equity wanting a piece of the legal industry. Investor interest has picked up very quickly, and few people have a better view of what’s happening than David Morley, former managing and senior partner of Allen & Overy.

"When I joined A&O in 1980, it had 100 lawyers in one office and £7 million in revenue," he tells us on The Non-Billable Podcast. "When I left 36 years later, it had 3,000 lawyers and more than 40 offices."

Since leaving A&O, Morley has chaired a litigation funder and a private equity firm, and led Europe for the $650 billion pension fund La Caisse (then known as CDPQ). Earlier this year, he and fellow former A&O leader Wim Dejonghe launched Dejonghe & Morley, a consultancy advising law firms and investors on what he calls "a dramatic change in the zeitgeist."

"There’s a level of investor interest we’ve never seen before in the legal sector," Morley says. "Twelve months ago it was niche - now it’s investors of all shapes and sizes."

He likens the pattern to accountancy, where private equity entered slowly before activity exploded. "It’s Hemingway’s line - gradually, then suddenly. That’s exactly what’s happening here."

A tidal wave of interest

Since launching the consultancy, Morley and Dejonghe have received more than 350 meeting requests and met over 80 investment houses interested in the sector. "We haven’t approached anyone," he notes. "They’ve all approached us." The appetite now spans the spectrum - "from the very biggest investors to the very smallest" - with firms looking to replicate the consolidation wave that's reshaped other professional services sectors.

He says the drivers are internal as much as external. "This is not private equity doing things to the legal sector," he says. "It’s the result of much deeper forces at play across professional services - consolidation, technology investment, the cost of hiring talent."

At the smaller end, he expects roll-ups and platform plays to continue (Blixt-backed Lawfront is the most commonly cited example), while mid-tier firms will explore investment to accelerate growth. Even at the top of the market, he predicts some firms will start using private equity as a strategic tool - to fund new practices, expand internationally or invest in technology and AI.

"If you find the right partner, capital brings more than money," Morley adds. "It brings discipline and focus, networks and a different kind of ambition."

Listen to the full conversation with David Morley on The Non-Billable Podcast.