US law firms are beginning to consider novel ways to attract private equity investment, circumventing rules that traditionally bar non-lawyer ownership of law firms and fee-sharing. The primary method being explored is the creation of a "managed services organization" (MSO). In this model, the law firm would spin off its non-legal, back-office operations, such as human resources, marketing, and technology, into a separate MSO. Outside investors, including private equity firms, could then acquire stakes in this MSO. The law firm would remain 100% owned by its lawyers and would pay the MSO for the administrative services it provides, allowing investors to generate returns from these revenues without directly owning the law firm or sharing in legal fees. This approach mirrors models already successfully used in the accounting and healthcare sectors to facilitate outside investment.
Several firms are actively exploring or have already adopted this structure. For instance, private equity firm Uplift Investors announced a deal in January 2026 with Louisiana-based personal injury firm Dudley DeBosier Injury Lawyers using the MSO model. Under this agreement, Uplift and Dudley DeBosier's partners co-own Orion Legal, the MSO providing operational support. Separately, an Arizona personal injury attorney spun off his firm's non-legal operations into an MSO as part of a $125 million deal with an unidentified investor. Furthermore, large firms like McDermott Will & Schulte, with revenues around $2.8 billion in 2024, have publicly acknowledged exploring MSO arrangements, with its chair, Ira Coleman, stating the firm is "fielding inbound interest." White-collar defense firm Cohen & Gresser in New York has also indicated it is discussing private equity investment through this model.
The appeal for law firms lies in the potential for significant capital injections, which can be used to invest in new technology, attract top talent, and facilitate growth in an increasingly competitive and capital-intensive legal landscape, particularly as AI integration becomes more crucial. For private equity, the legal sector represents a "last frontier" for investment within professional services, offering a new avenue for deployment of capital. Experts like Adil Taha, co-founder of Taha & Watmough, anticipate that if a major firm like McDermott successfully implements an MSO, it could "open the floodgates" for other top US firms to follow suit, potentially leading to a broader consolidation of the legal market, particularly among personal injury practices initially. While Arizona has permanently dropped the ban on non-lawyer ownership, most US states still maintain these prohibitions, making the MSO model a critical workaround.
