Law360 Canada (September 1, 2026, 1:31 PM EDT) --

Jacob Murad

Private equity is beginning to enter the legal industry with transactions such as Uplift’s acquisition of Dudley DeBosier Personal Injury, Trive Capital’s acquiring Massumi + Consoli, and Morgan & Morgan’s hiring of JPMorgan to explore a private equity sale.

There have been many articles and social media comments decrying these transactions with the main argument being that the legal industry is about public service, rule of law and access to justice, not profit. The idea here is that if private equity firms enter the legal market as de facto owners, the focus of non-lawyer managed law firms will only be on maximizing profit for shareholders, and this will impact the purpose of a lawyer.

There are other arguments against non-legal ownership and management of law firms, and I have discussed them in a previous article, but this article will focus exclusively on the repeated flawed argument: that clients and the public at large will suffer from private equity entering the legal market due to a non-lawyers’ focus on maximizing profits for shareholder value instead of pursuing justice.

It is clear to me that those who are making this argument clearly have no experience with private equity, acquisitions or substantial investing in private markets outside of a theoretical understanding of the issues or as a lawyer representing a private equity client. Namely, there are a few major incorrect assumptions that are being made: (1) that most lawyers currently sacrifice (or should sacrifice) their individual wealth needs for the pursuit of justice for clients; (2) those lawyers who do sacrifice their individual wealth needs are in fact better serving the public than they would if they did not pursue this course; and (3) that maximizing profit is necessarily bad for justice.

1. Assumption of the lawyer’s virtuous sacrifice

I operate a mid-sized law firm, coach students and meet with lawyers young and old every day and throughout my career. Frankly, the assumption that most lawyers enter the profession to perform a charitable virtuous function as their goal is naive. If you were to ask most law students and lawyers why they entered the profession, there may be some who have a passion for social justice, but most would simply say that they expected higher salaries than the average profession and didn’t want to be doctors to avoid the sight of blood.

Law firms have some of the highest employee turnover rates, with lawyers jumping from salary to salary. Lawyers also have a high burnout rate due to the mental health issues prevalent in the profession in the pursuit of trying to meet billable targets under stressful deadlines. Law societies are aware of this and try to address the situation with mental health programs, coaching and professional guidelines on how to maintain the client relationship while earning a fee. In fact, you could argue that the reason there are lengthy ethical rules about trust account management is precisely because most lawyers collect money upfront for their services to ensure they are paid fairly for their work.

When you look at the industry, only lawyers who work for others in legal aid programs or charitable organizations are willingly sacrificing individual wealth (they have lower salaries) for a worthy cause, but these are not the organizations that would be taken over by private equity. Those lawyers who work in social justice programs will continue to do so.

One could argue that all lawyers discount their fees in some way or work without money in trust to better serve the client at the lawyer’s discretion and this financial inefficiency would not be acceptable to a non-lawyer manager who does not understand the lawyer/client relationship. But whether a lawyer works inefficiently or takes on more work to satisfy a client is less about access to justice and more about ensuring the client stays loyal or spends more money later (for example, discounting probate work fees to get a client’s real estate business). I would also argue that these situations are examples of providing poor service to clients and withholding access to justice (which I will speak to shortly).

The fact is that lawyers have their own bills to pay and run their practices, hire and fire employees, and collect their bills in order to stay functioning. The entry of private equity into these industries does not change this practice — it simply continues it and if anything, improves it since those non-lawyer managers have better knowledge of business organizations than lawyers. This is because most lawyers are inexperienced in running a business, so they are inefficient in allocating their cash flow and collections.

Instead, the current status quo produces lawyers who mismanage trust accounts and law firms that go out of business seemingly overnight. When either of these situations happen, is that better or worse for the clients they serve?

2. When the lawyer’s sacrifice is actually poor client service

There are of course lawyers who do work for clients for free or carry their work in progress or billings for years with the same client to ensure they are being properly serviced. They attend hearings without money in trust and do whatever they can to protect their clients even if it deprioritizes paying clients.

The second assumption against private equity’s takeover of a law firm is that private equity will not continue that same practice because this would hurt the profits of a business. But are these practices what is truly best for the client or their access to justice? Consider the example when a lawyer works for a client without money in trust for months and then sends a very large bill. Often, this will be the first time a client sees a bill from his or her lawyer and cannot pay. This lack of transparency will lead to further disputes, even bill assessments or lawsuits between lawyer and client and creates a conflict between them. Lawyers will even use this outstanding bill as leverage at a key moment in a matter — they are permitted to withdraw from representation due to uncollectible bills. I have seen this too many times and the statistics bear this out: LAWPRO consistently reports that inadequate communication and transparency cause more harm and complaints than anything else. This is all because lawyers are either inefficient in billing practices or are uncomfortable discussing financial matters (such as trust top-ups) with their clients — crucial parts of sustaining a law practice. Private equity management teams do not have this issue — the law firm has to be transparent and provide proper service to its clients to achieve client retention and a return on investment.

If clients cannot afford that particular firm or do not value a lawyer’s work, both sides and justice as a whole is served with proper communication. For example, sometimes clients who call the pro bono hotline (for which I volunteer) are best served by having a lawyer explain that litigation costs more money and it is better to move on. If that same lawyer took on the client’s case without trust funds, only to charge them later for something they could not afford, withdraw from representation and leave the matter within a clogged court system, it wouldn’t be an efficient practice nor does it serve the interests of justice.

3. Why is maximizing profit not necessarily in the interests of justice?

The last assumption, and the biggest one, is that private equity’s goal of maximizing profit is not sufficient to serve the interests of justice. There is simply no basis to this assumption. There are large treatises on the virtues and cons of a capitalist society by world-famous economists but suffice it to say that today we in North America live in a capitalist society. Everyone has the freedom (albeit with some regulation and government oversight) to choose where to spend their time, invest their money and maximize their personal net worth. It is in the best interests of investors for a law firm, if owned by private equity, is run efficiently to provide returns. This necessarily requires better service to clients, not worse.

Companies like Amazon, Uber and Clio use technology to offer fast and reliable service to their customers and this has led to massive growth and widespread use. The average person might criticize the salaries of the CEOs of these companies, but they will still use the product because they are getting proper service, and this service was necessarily a result of proper leadership and execution.

In the context of a law firm, if a client is being serviced correctly this means they are receiving regular communication from their lawyer, being properly billed and given solutions regardless of where the client lives or circumstances to maintain retention of the client and referrals of new clients. That is precisely what access to justice is all about. If non-lawyer managers fail in execution, they will simply do no better or worse than current managing partners of large firms that also fail or a lawyer who misappropriates trust account funds and receives a suspension.

As private equity companies continue to enter the legal industry in North America, it is important to become more educated on how they work and the positives they provide including to the legal industry itself, so that if regulation is the goal, it can be done responsibly with the clients in mind and not based on biased conclusions.

Jacob Murad is the managing partner and counsel to Bluestar Equity, where he focuses on mergers and acquisitions. He also owns KPA Lawyers, part of the Bluestar services group. He is the author of Freedom by Acquisition: From Search to Exit and is a regular mentor and coach for the Law Society of Ontario. He can be reached at jacob@bluestar-equity.com.

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