'This time feels different': ex-A&O chiefs launch consultancy for private capital investment in law

As investor interest in law firms heats up, two former Allen & Overy leaders are launching a new firm to guide both sides of the table.

David Morley, former senior partner at A&O, and his long-time colleague and successor Wim Dejonghe, have teamed up to launch a new consultancy focused on advising private capital investors and law firms on strategic investment opportunities in the legal sector.

Dejonghe & Morley, which offers "strategic advisory for law firms and investors", comes amid a quiet but growing wave of interest from private equity and family offices looking to enter the legal market - a trend Morley says has rapidly accelerated in recent months.

"Over the last three or four months, we’ve had around 20 unsolicited approaches from private equity firms and family office investors", Morley tells Non-Billable. "We didn’t go looking for them. They came to us."

Big Law pedigree

Morley and Dejonghe bring a rare combination of deep legal pedigree and commercial insight. The two worked closely together at A&O, where Morley served two terms as senior partner and Dejonghe later oversaw the firm’s landmark merger with Shearman & Sterling.

Since leaving the firm, Morley has held senior roles in the investment world, including head of Europe at CDPQ, the Canadian pension fund with over $450 billion under management. That experience has informed his perspective on what private capital sees in law, and how firms should think about the opportunity.

What investors want

Investor interest spans the full spectrum, from mid-sized funds to institutional heavyweights.

Names like CVC and Cinven have been cited in reports as showing interest, and Morley confirms the scale of inbound inquiries. "The investors talking to us have assets under management ranging from $8 billion to $80 billion", he says.

But the bottleneck isn’t funding - it's mindset. "The biggest challenge right now isn’t a lack of capital", Morley explains. "It’s that many law firms don’t even think of private equity as an option. That was true in other professional services sectors, until it wasn’t."

In the near term, he expects most of the activity to focus on the mid and lower ends of the market, with investment sizes typically falling in the $25 million to $50 million range.

While some investors have raised concerns about the lack of recurring revenue in law firms (unlike, say, annual audits in accountancy), Morley says that view is evolving. "They’re coming to see that while revenues may not be contractually recurring, law firms often have very stable, sticky client bases with steady revenue growth."

A strategic turning point

Despite the mixed results of law firm IPOs and ongoing scepticism in some corners of the legal profession, Morley believes a shift is underway, especially among a new generation of more commercially minded law firm leaders.

"Until recently, external capital wasn’t even seen as a strategic option. Now it is", he says. “Even if you’re not pursuing it, you need to understand the dynamic - because you’ll be competing against firms who do."

Morley and Dejonghe's new venture is designed to help firms explore that option thoughtfully, and to assist investors in understanding the idiosyncrasies of law firm structure, culture and governance.

"This isn’t about slashing costs", Morley adds. "Most of the investors we’re speaking to are long-term thinkers. They see a fragmented market, no national legal brands, lots of duplicated infrastructure. There’s clear potential for efficiency and consolidation."

And while private equity still triggers nervous reactions in some legal circles, Morley argues that stigma is outdated. "There’s a new generation of leaders emerging in law who see external capital not as a threat, but as a chance to turbocharge their firms’ growth."

"These are serious people with serious money”, Morley says. “This time does feel different".