The law firm McDermott Will & Emery is exploring a potential restructuring that would allow private equity investment, a novel concept for a U.S. law firm. This model would separate the firm into a traditional partnership owned by lawyers and a separate managed services organization, or MSO, which could be owned by outside investors. The lawyer-owned firm would then purchase administrative services from the MSO. Such a structure is designed to comply with American Bar Association rules that prohibit non-lawyers from owning stakes in law firms.
Ira Coleman, the firm's chair, characterized the discussions as very preliminary, stating the firm was listening to new ideas as part of its strategy to attract top talent. This MSO framework, already used in accounting and healthcare, is attracting increased interest from law firms and investors. Adil Taha of Taha & Watmough suggested that several other major U.S. firms are already establishing similar MSOs and that a move by McDermott could encourage wider adoption.
This growing interest in external capital could intensify competitive pressures within the global legal industry. While private equity investment in UK firms has previously focused on mid-market practices, some larger firms like Clifford Chance have also indicated a potential openness to such opportunities.
Ira Coleman, the firm's chair, characterized the discussions as very preliminary, stating the firm was listening to new ideas as part of its strategy to attract top talent. This MSO framework, already used in accounting and healthcare, is attracting increased interest from law firms and investors. Adil Taha of Taha & Watmough suggested that several other major U.S. firms are already establishing similar MSOs and that a move by McDermott could encourage wider adoption.
This growing interest in external capital could intensify competitive pressures within the global legal industry. While private equity investment in UK firms has previously focused on mid-market practices, some larger firms like Clifford Chance have also indicated a potential openness to such opportunities.
