Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

This is what PE is doing in medical, dentistry and physical therapy. Anything with a license is simply split up.

Let me finish that for you:

Anything with a license is simply split up, and turned into fecal rubbish vomit.

Our thoughts and prayers are with BigLaw during this difficult time.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

There is very little non-legal staff in law firms these days. They’ve been shedding paralegals and secretaries for years now. And all the revenue is from lawyers billing hours. How does the PE entity make any money?

The revenue earning branch (ie the business not owned by PE and owned by lawyers) has to pay five percent of its revenues every year for intangible assets owned by the PE owned business. Things like licenses and branding. It’s f’d up.

Law firms don’t really have branding and non-legal licenses or other intangible assets not directly related to the legal services. To do this would require a total overhaul of legal ethics rules.

Regulatory arbitrage. Airbnb is illegal until it's not. Uber is illegal until it's not. This is how opportunities are realized by PE firms.

Overhauling legal ethics is not as heavy a lift as it might seem. It wasn't all that long ago that lawyers were not even allowed to advertise. Change comes quickly.

Anonymous wrote:Law is the one profession that can legislate its own interests.

How? Legislators legislate. Many are/were lawyers, but their ambitions are typically political, and not to do with legal work.

Anonymous wrote:

Anonymous wrote:Not a lawyer, but could see it happening. It’s happening a lot in medicine, and starting to happen in accounting too.

It's already happened in accounting. Outside the Big 4, almost everything is up for grabs.

Yes--accounting is a little different--because in accounting the CPA side keeps all attest functions but the PE side gets the advisory functions in addition to the back office stuff. So the PE side gets both revenue from the back office services they are providing the CPA side AND direct client revenue from the advisory work.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

There is very little non-legal staff in law firms these days. They’ve been shedding paralegals and secretaries for years now. And all the revenue is from lawyers billing hours. How does the PE entity make any money?

The revenue earning branch (ie the business not owned by PE and owned by lawyers) has to pay five percent of its revenues every year for intangible assets owned by the PE owned business. Things like licenses and branding. It’s f’d up.

Law firms don’t really have branding and non-legal licenses or other intangible assets not directly related to the legal services. To do this would require a total overhaul of legal ethics rules.

The whole point is the law firm would invent ip that doesn’t currently exist but they can assign large value to.

How? Isn't their IP essentially confidential client information?

Anonymous wrote:Not a lawyer, but could see it happening. It’s happening a lot in medicine, and starting to happen in accounting too.

It's already happened in accounting. Outside the Big 4, almost everything is up for grabs.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

There is very little non-legal staff in law firms these days. They’ve been shedding paralegals and secretaries for years now. And all the revenue is from lawyers billing hours. How does the PE entity make any money?

The revenue earning branch (ie the business not owned by PE and owned by lawyers) has to pay five percent of its revenues every year for intangible assets owned by the PE owned business. Things like licenses and branding. It’s f’d up.

Law firms don’t really have branding and non-legal licenses or other intangible assets not directly related to the legal services. To do this would require a total overhaul of legal ethics rules.

The whole point is the law firm would invent ip that doesn’t currently exist but they can assign large value to.

Not a lawyer, but could see it happening. It’s happening a lot in medicine, and starting to happen in accounting too.

They’re allowed because of called Management Services Agreements. The doctors/attorneys/etc. collect legal fees but must pay money back to the PE entity things like IT and infrastructure.

The MSA thing isn’t just used by PE. Litigation finance firms are pushing into using it to invest in law firms as well (usually midsize litigation firms).

In accounting firms, the PE investment often comes with a merger bc the PE firm promises to make operations more streamlined post-merger. There’s an accounting firm called Sorren which is PE backed and was formed by the merger of 13 smaller accounting firms (or close to that number). McDermott did recently acquire Schulte Roth.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

There is very little non-legal staff in law firms these days. They’ve been shedding paralegals and secretaries for years now. And all the revenue is from lawyers billing hours. How does the PE entity make any money?

The revenue earning branch (ie the business not owned by PE and owned by lawyers) has to pay five percent of its revenues every year for intangible assets owned by the PE owned business. Things like licenses and branding. It’s f’d up.

Law firms don’t really have branding and non-legal licenses or other intangible assets not directly related to the legal services. To do this would require a total overhaul of legal ethics rules.

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

So PE will just be a vendor offering HR and IT services? I mean …

If this happens then PE truly will have won. It is totally incompatible with existing legal ethics rules.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I belive there are ethical restrictions at play here.

They're planning on making the lawyers and the non-legal staff/infrastructure separate entities. PE would own the infrastructure part and then the partners would own the lawyer part.

There is very little non-legal staff in law firms these days. They’ve been shedding paralegals and secretaries for years now. And all the revenue is from lawyers billing hours. How does the PE entity make any money?

The revenue earning branch (ie the business not owned by PE and owned by lawyers) has to pay five percent of its revenues every year for intangible assets owned by the PE owned business. Things like licenses and branding. It’s f’d up.