Happy Wednesday! Here are some Private Market Labs Insights quick hits from our recent conversation with Tom Lenfestey, as well as a reminder to tune in tomorrow (!) for a fantastic episode with Brad Englert

Tom Lenfestey chatted with me about law firm M&A. Some top insights:

1) Regulatory hurdles restrict activity: The American Bar Association’s (ABA) Model Rule 5.4 has historically set significant barriers for law firm M&A, mandating that law firms be entirely lawyer-owned to preserve their independence.

2) Slow changes ongoing: The transformation of law firm ownership rules in Utah, Arizona, and Washington D.C. reflects a shifting mindset, that law firms owned by non-lawyers can be ethical industry actors and can even help expand access to justice.

3) Revolutionizing Legal Services with Non-Lawyer Ownership: Law firm M&A is more common outside of the US. Firms owned by non-lawyers benefit from professional management and external investments, leading to advancements in technology implementation and service delivery.

4) How to evaluate a law firm for acquisition: A firm’s area of focus significantly affects its business model, marketing approaches, and profitability margins. Personal injury law, for instance, operates distinctly compared to estate planning or other legal practices.

5) Tie-in to #SBA rule changes: New regulations around partial buyouts allow sellers to remain involved, offering more flexibility and opportunities for both traditional and non-attorney buyers to engage in law firm acquisition.

Hope this was helpful! Check out the full episode here: https://privatemarketlabs.com/buying-law-firms-next-trend-tom-lenfestey/

And don't miss tomorrow's conversation with Brad here on Searchfunder at 3:00 CT