Before Private Equity Partnered With Law Firms, It Built Everything Around Them
Private equity didn't need to own law firms to profit from legal work. It spent years investing in the software they use, the services they rely on, and the infrastructure behind their work. Now, PE is finding ways to invest inside the firms themselves, as technology becomes a bigger part of what clients are paying for.
Katon Luaces
Welcome to Attorney Intelligence, the weekly newsletter from PointOne where we break down the forces reshaping legal from the inside out.
In Q3, I looked at how the law firm became investable through the MSO structure, which lets law firms receive outside capital while attorneys maintain control of the legal work. I expected the biggest early deals to come from consumer practices like personal injury. It seems I was half right.
This week, a 550-lawyer insurance defense firm took PE money. Wood Smith Henning & Berman, with 43 offices across 23 states, announced it had accepted investment from Charlesbank Capital Partners to form a management services organization (MSO). Charlesbank, a middle-market PE firm, is no newcomer to legal, thanks to Aprio Legal. The deal reportedly values the firm at about $700 million, making Wood Smith the largest US firm to make this kind of move.
The path to PE investment in the legal space didn’t start with law firms. Between January 2024 and July 2026, PitchBook recorded 135 US deals involving law firms and legal services. About 50 were backed by PE sponsors, and nearly every one of those went into companies that sell to law firms: court reporters, eDiscovery providers, process servers and software makers.
Investors claim there’s a reason they waited to invest in law firms themselves. Besides the regulatory limits, one of the largest barriers to PE investment in law firms is that client loyalty follows lawyers, not firms.
Today, I offer a caveat. That barrier is becoming more permeable, thanks to a third party that has infiltrated the client relationship: technology.
Clients hire a trusted advisor, and increasingly, the firm behind them
Large companies and their law firms rarely work together just once. These relationships often last years or decades, as the company and its lawyers work together closely and the lawyers come to know the business inside and out. Over that time, a good lawyer becomes more than someone who gets the work done. They become a trusted advisor, and that personal trust, which belongs to the lawyer, has always sat at the core of legal work.
For an investor, that’s a real risk. Lawyers can’t be bound by non-competes, because public policy favors clients’ freedom to choose counsel. Picture a sponsor that buys into a firm and pays out its partners, only to watch those partners leave a year later with their clients. That’s why practices where clients stick closely to individual lawyers, like corporate M&A and fund formation, have been seen as harder targets.
Law firms have long believed that clients hire lawyers, but more recent stats reveal that this dynamic may be shifting. A survey of over 350 corporate counsel revealed that only 1 in 4 said they hire lawyers, not law firms. The rest attribute a vote to the firm, with 28.4% believing that the individual lawyer isn’t enough. More strikingly, 21% of clients don’t even know who their relationship partner is.
If clients aren’t only buying the lawyer, they’re also buying something the firm provides. Today, a growing share of that is technology.
New AI-native firms are built on that idea, and they’re competing with traditional firms for the same clients. Crosby, an AI-native firm that reviews and negotiates commercial contracts, charges clients a fixed price per contract. AI handles the first review while lawyers handle negotiation and judgment. Its client list grew to about 100 companies, including Cursor and Tishman Speyer, and investors have put in $85.8 million in nine months. When the system delivers the speed and the lawyer delivers the judgment, the firm’s value no longer depends on any one partner, and that is what investors are paying for.
PE built the systems behind legal work
The services behind every matter
PE has spent the past two years buying up the services every litigator relies on, one acquisition at a time:
Align Capital’s Counsel Press, which handles appellate filings, acquired six companies between August 2024 and October 2025, including appellate support firms, a legal printer and online case management tools.
Apax-backed Lexitas, which provides court reporting and process serving, acquired two court reporting firms and a process server between August 2025 and June 2026.
Gridiron-backed ABC Legal handles e-filing and process serving and acquired three process serving and litigation support firms between May 2025 and July 2026.
Abry-backed US Legal Support, a court reporting and record retrieval provider, acquired a court reporting firm and a medical records retrieval company in 2024 and early 2025.
Carlyle bought QuisLex, which provides document review, contract management and compliance support for legal teams, for $1.4 billion in 2024.
Each deal brings dozens of local providers under one owner with the same systems and standards. PE firms are thereby selling to thousands of law firms, learning exactly how they work and building relationships.
The software lawyers use to produce the work
PE is also behind much of the software lawyers use every day.
Litera makes drafting and document comparison tools. It is owned by Hg Capital, a European software-focused PE firm. In its first two years under Hg, Litera made 12 acquisitions and grew to serve over 15,000 customers.
NetDocuments, a document management system, was acquired by Clearlake Capital Group in June 2022, at a reported valuation of more than $1.5 billion.
iManage, its main competitor, was recapitalized by Bessemer Venture Partners and Silver Lake Waterman in September 2024, at a reported valuation of more than $1 billion.
Relativity, the eDiscovery platform, announced Silver Lake as its largest shareholder, with a significant minority stake.
Anaqua, which manages intellectual property portfolios, was bought by Nordic Capital for about $2.5 billion.
Elite, Thomson Reuters’ financial and practice management software for law firms, was sold to TPG in 2023 in a deal valuing it at about $500 million. In 2025, it was sold again, to Francisco Partners. Elite serves about 2,000 law firms, including 75% of the Am Law 100.
Consider what a client receives in a typical matter. The contract was drafted in Word with Litera’s tools, saved in NetDocuments or iManage, and the discovery was reviewed in Relativity. Every one of those systems has a PE investor behind it.
Together, these investments give PE firms considerable influence over the law firm environment, from shaping the software thousands of law firms rely on to gaining an increasingly clear picture of how the legal industry operates.
The blurring line between legal services and technology
Clients used to judge a firm on its lawyers. The client trusts the lawyer, and the lawyer relies on systems the client never sees. That third party has long been part of the relationship, but rarely as visible or influential as it is today. AI has made it hard to ignore, with the rapid adoption of legal AI tools revolutionizing the way law firms operate and deliver their services.
Clients are now also inquiring how the legal work is produced. About 82% of general counsel agree or strongly agree that they expect their firms to track and share their use of AI in client matters. This same study concluded that law firms are now judged on more than legal expertise: clients also weigh how well a firm uses, governs and explains the technology behind its work.
When a partner leaves, their relationships may leave with them. The firm’s systems stay.
If clients value how quickly and reliably a firm delivers, part of that value comes from systems the firm owns. That part doesn’t walk out the door, and it’s exactly what PE investors have been funding for years.
So far, venture capital has funded AI-native firms, and their structures look a lot like the businesses PE already owns. Manifest OS raised $60 million to build and run its own law firms, combining a proprietary AI platform, a centralized back office and a shared brand. As these firms mature and their early investors look for a way out, PE could be a natural next owner, with the law firm still run by its lawyers.
Wood Smith shows how PE Is moving inside the law firm
Wood Smith Henning & Berman illustrates where this shift is heading. The 550-lawyer insurance defense firm serves insurance companies that closely scrutinize legal costs, creating pressure to deliver efficient legal work. Wood Smith has long invested in technology, including AI, eDiscovery and data analytics, to support how it delivers legal services. Today, that established infrastructure is part of what makes the firm attractive to PE investors.
Charlesbank's investment goes into WSHB Support Services, a newly formed management services organization, while Wood Smith's lawyers retain control of the legal practice. The investment will fund expansion and improvements to the firm's operating infrastructure, including AI and data science.
While Charlesbank won't direct the legal work, its investment will help shape the systems through which that work is delivered.
The relationship now has three dimensions
For decades, the client relationship had two parts: the client and the lawyer. Today, there’s a third: the systems that produce the work. After years of investing in technology surrounding law firms, PE is now extending its influence over how legal services are produced and delivered directly within the firm’s infrastructure.
A wave of venture capital investment in AI-native legal technology has accelerated this shift, further cementing technology as an integral part of not just how firms deliver legal services, but also what clients are paying for. As client expectations around AI use grow, more firms may turn to outside capital, through an MSO or similar structure, to fund the systems needed to meet them.
The lawyer still holds the client’s trust, but that trust increasingly extends to the systems behind the work. Firms that can demonstrate how their investments in technology improve efficiency, consistency, and transparency will be better positioned to earn that trust and distinguish the value they deliver.
Legal Bytes
An offshore firm sells a stake to fund AI. Mourant sold a 27% stake to mid-market PE firm MML, and will use the money for technology including AI, plus international expansion and lateral hires. The Global Legal Post.globallegalpost
Big Law takes a closer look at the MSO. A group of senior White & Case lawyers is examining the structure, while McDermott Will & Schulte has kept meeting potential investors but remains far from a decision. Financial Times.tradersunion
PE keeps building around the firm. Control Risks spun off its eDiscovery and investigations business lines into a new company backed by Beringer Capital, with plans to invest in technology and talent. Legaltech News.law
I’m mapping how capital is reshaping legal
At PointOne, our view is that the firms investors value most will be the ones that can show, with data, how their lawyers and systems create value together.
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