A high proportion of law firms, mainly those based outside of London, are actively considering external funding from private equity providers according to a recent survey by litigation funding company, Harbour. In a crowded market, high competition levels were found to be one of the main factors for law firms wishing to obtain private equity funding. Another reason for the increase in the interest for external funding was growing concerns over difficulties in finding and retaining new talent.
40% of the 203 law firm partners surveyed which were based outside of London stated that their biggest challenges within the legal market was competition, this was compared to 30% of partners which were based in London. For firms based outside of London, 87% of partners stated that they were considering private equity so that they could expand their firms, and 42% of partners within the same category stated that they were considering a merger or acquisition within their growth strategy. This was compared to only 20% of partners based in London.
According to Harbour’s CIO, Ella MacPherson, ““The opportunities and challenges for firms outside London differ. Our experience is that many of the most creative and innovative law firms are based outside the capital.”