Mourant has sold a minority stake to private equity firm MML, in the latest signal of increasing interest in the legal sector by private capital.
The specific terms of the deal were not disclosed, though according to the Financial Times, which first reported the story, MML has taken a 27% stake.
Mourant said the money raised would be used to invest in technology including AI and international expansion, including acquisitions, law firm partnerships and lateral hiring.
Like its offshore rivals, Mourant does not publish its financials, although the FT reported its revenue last year would place it among the top 50 UK law firms, meaning it exceeds £127m.
Mourant is known as a top-tier offshore law firm, with a headcount of around 1,000 across nine locations and a client list including Goldman Sachs and CVC. Alongside legal services, it provides corporate, entity management and fund administration services.
While external capital has been present in the legal sector for several years, investment has typically focused on single-discipline businesses. GLP understands this is the first time capital has been raised for the combination of services offered by Mourant and is also the first transaction by one of the “offshore Magic Circle” to bring private equity investment at a group level.
The investment is being made into Mourant Group Limited, a holding company established last year that will continue to fully own the group’s corporate services and consulting businesses and supply managed services to its separate law firm entities.
Mourant’s existing owners are co-investing alongside MML, it said, and will retain control of both the group and its leadership. Control and ownership of the separate law firm partnerships will remain with the relevant locally-qualified partners.
Mourant’s CEO, Jonathan Rigby, said the investment “does not change what we are building, it changes the pace at which we can build it”.
Noting MML’s sector experience, he added the PE firm “shares our conviction in the integrated services platform and in the team we have assembled. Our clients can expect the same Mourant they know, for the long term, with greater capability and momentum behind it”.
MML is a mid-market private equity firm backed by a €1bn fund that specialises in providing minority growth capital to owner-managed businesses. The firm has already invested in the legal sector, having taken a minority stake in IP firm Rouse in 2022.
Robert Devonshire, the partner at MML who worked on the Mourant deal, commented: “We are of the belief that Mourant is the most compelling platform in its market. The combination of legal, governance and consulting services under one umbrella, built on a culture that consistently attracts and retains exceptional people, is rare and genuinely durable.”
MML was advised on the deal by Pinsent Masons, while Mourant was advised by Addleshaw Goddard.
Mourant also called in Dejonghe & Morley, the consultancy business launched last year by former Allen & Overy leaders David Morley and Wim Dejonghe to advise on PE investment in law firms.
Morley said on LinkedIn that the Mourant deal was a sign of what is to come.
“The structure is as interesting as the deal,” he said. “Mourant wanted growth capital and an active growth partner while its owner-managers kept control, and those owner-managers are co-investing alongside MML.
“Minority investment remains rare in the legal sector. On the evidence of this deal, it is likely to become a more important part of the options open to larger firms, particularly those looking for a growth partner rather than a buyer.”
The deal comes amid ongoing private equity interest in the legal sector, driven by its high profit margins, steady cash flow and fragmented market, which is seen as ripe for consolidation. However, some analysts argue that the UK’s regional legal market is proving to be less fertile ground for PE firms seeking to build national practices than the accountancy sector.
Last December, offshore rival Walkers agreed a deal with Vitruvian Partners to co-invest in its non-legal fund and corporate services arm, while in April Fortress Investment Group acquired a minority stake in Rafi Law Services for $125m, in a deal that allowed the Arizona-based personal injury firm to bypass non-lawyer ownership restrictions.
So far PE investment has focused heavily on smaller and mid-sized law firms, though that could be set to change. McDermott Will & Schulte confirmed late last year it was considering a restructuring that would effectively enable it to sell a stake in its business to private equity.
Email your news and story ideas to: [email protected]
