Two former senior partners of legacy UK Magic Circle firm Allen & Overy have launched a consultancy to advise on private equity investment in law firms. 

Wim Dejonghe and David Morley launched their firm on Monday (19 May) in response to a number of approaches from both private equity and law firms and are already working with potential investors, Dejonghe told GLP. 

The firm – named Dejonghe & Morley – has been set up amid growing private equity investment in the UK legal profession, which hit a record £534m last year according to research by merger specialist Acquira Professional Services. 

Investors have been attracted to the legal sector’s potential due to steady revenue streams and a fragmented landscape of smaller firms that enables them to pursue a ‘buy and build’ strategy to create larger law firms. 

PE interest in law firms is part of a broader trend of private investment in the professional services sector, with Cinven taking a stake in Grant Thornton and Apax buying Evelyn Partners’ accounting arm among the major deals of the last six months alone. 

“We saw what was happening in other service industries, particularly the influx of investment into accounting firms over the last three years,” Dejonghe said. “There was a need in the legal sector for a consultancy that could bring together law firms and private capital.”

Dejonghe & Morley’s services will run the gamut from helping identify suitable partners to deal structuring and supporting firms after investments or mergers, according to its website. 

Dejonghe expects the firm will work mainly with small and medium-sized law firms, with revenue of up to £150m. 

“Larger law firms have less appetite for investment, they tend to have the resources they need to invest in tech and maximise efficiencies,” he said. “It’s the medium-sized firms that will likely find the prospect most appealing. The hardest place to be is the middle – you’re trying to be everything to everyone but don’t necessarily have the ability to compete with larger firms in terms of tech and talent.”

Morley and Dejonghe served successively as Allen & Overy’s senior partner – Morley between 2008 and 2016 and Dejonghe for the following eight years until the firm’s merger with New York firm Shearman & Sterling last May to create A&O Shearman went live. 

Dejonghe was widely credited as being the architect of the tie-up, which created a global top 20 law firm by revenue. Following the merger he stayed at the firm as a partner but left last month, according to his LinkedIn bio. 

Meanwhile, since leaving Allen & Overy in 2016 Morley has served in roles including chair of litigation funder Vannin Capital and PE firm Elaghmore Partners and managing director and head of Europe for major institutional investor CDPQ.

DWF – one of the UK’s top 25 law firms by revenue – was taken private by Inflexion in 2023 following a checquered history as a public company in a £342mn deal, while investment company Investcorp bought UK family law firm Stowe last year from mid-market PE firm Livingbridge. 

Earlier this week Lawfront, a legal services group backed by London PE firm Blixt, also announced the acquisition of its sixth regional UK law firm in a deal that takes its revenue to more than £130m.