Private Equity Funds Ponder Purchase of Up to 20% Interest in UK Law Firms

Looking ahead to 2011, when non-lawyers will be permitted to invest in United Kingdom law firms, some private equity funds are talking about purchasing as much as a 20 percent share in some unidentified law partnerships.

Investors are expecting profits of 15 percent or more, one consultant tells Bloomberg. Among the equity funds reportedly in talks with potential law firm targets are Fleming Family & Partners Ltd., Lyceum Capital Partners LLP and Phoenix Equity Partners Ltd.

“Law firms are pretty attractive investments as they have stable cash flows, long track records of business operations and increasingly are much better run,” says executive director John Llewellyn-Lloyd of the Noble Group Ltd. investment bank. “You would expect them, like any professional services business, to provide a pretty good return.”