Private Equity Strikes Again in the Legal Sector
No one in the corporate legal world had until recently heard of Inflexion Private Equity Partners. This changed dramatically when they announced in July the purchase of the top 50 law firm, DWF.
This London-headquartered private equity house was set up over 20 years ago by Simon Turner and John Hartz, described by insiders as the “doyens of private equity”.
The company has approximately £8bn in funds under management, and its current portfolio in the legal sector includes Chambers Directory, National Accident Helpline, a claims management company in the personal injury sector, and O’Neil Patient, a top 100 conveyancing law firm.
Well, they have now announced a very astute investment in an online platform created by city giant Allen & Overy.
The legal and compliance data subscription platform Aosphere will become a standalone entity, with A&O retaining a significant minority stake in the business it created in 2002 as Derivative Services and rebranded in 2015.
Alongside the “strategic investment” by private equity firm Inflexion is backing from Endicott Capital, a US-based investor specialising in the information services industry.
Another private equity-backed business, Lawfront, is also in the news again for another acquisition. This time is number six, namely acquiring Leicester-based Patterson Commercial Law, which has 10 fee-earners. Another strategic move as this strengthens by way of a tuck in the acquisition of the large East Midlands firm, Nelsons.
Behind Lawfront, is Blixt, a pan-European private equity firm headquartered in London that claims to have access to more than £200 million in long-term institutional investor funding.
Putting aside the usual lawyer disdain for private equity in this sector, the reality is that likes of Inflexion and Lawfront would not be investing unless they could see a return. Interestingly, in 2019, the Financial Times reported that Inflexion was producing returns as much as three times the amount invested.
It is no surprise that these firms are expanding rapidly in the legal sector. More, I’m sure, will follow!
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