UK law firm mergers declined by 25% in 2024, with just 91 deals completed compared to 122 the previous year, as senior partners increasingly hold off on consolidation in the hope of attracting private equity investment, according to figures from Lubbock Fine.

The shift comes amid a growing appetite from private equity firms for legal services businesses, particularly those with strong recurring client revenue. Inflexion’s de-listing of DWF and Blixt-backed Lawfront’s acquisition of Trethowans marked key milestones in private capital’s entry into the sector.

Mark Turner, a partner at Lubbock Fine, said, “There has been growing interest among private equity houses to invest in law firms, especially those with a high percentage of retained clients. But this interest is still in its infancy.”

Turner added that cost pressures, such as increases in national insurance contributions for employers, could push many small and mid-sized law firms into mergers. In 2024, 498 firms closed down, with financial difficulties and regulatory breaches among the top causes.

Meanwhile, larger consolidators like Knights Group continue to grow, having acquired more than 20 firms since 2018 as they target regional players impacted by the market downturn.

Source: City AM

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