The June 6, 2026, news that America’s largest personal injury law firm may be seeking private equity capital could signal a dramatic quickening in the pace of change around legal business ownership and outside investment.
Morgan & Morgan, the Florida-headquartered plaintiffs’ firm, has reportedly engaged Wall Street investment titan J.P. Morgan to explore bringing in investors, particularly private equity players. The deal, according to Reuters and others, could raise more than $1 billion and set the stage for an eventual initial public offering—provided the firm can overcome various regulatory and legal ethics hurdles.
Morgan is just the latest U.S. firm to consider creating an investment vehicle that would allow it to reap private equity capital while sidestepping thorny legal ethics prohibitions on mingling lawyer and non-lawyer funds.
Not everyone is thrilled about the prospect, however. Colorado and Illinois have passed legislation to curb private equity investment in law firms. The Colorado bill was signed into law June 3 and the Illinois legislation awaits the governor’s signature as of June 2026.
‘Approached Constantly’
With offices in all 50 states and gross revenues last year estimated at $2.4 billion, Morgan & Morgan has been a prime target for potential investors, according to firm co-founder John Morgan. “Like many firms in America, we are being approached constantly and we listen," Morgan told Reuters. The 1,200-lawyer firm is headed by Morgan, his wife and co-founder Ultima and their children and has 200 equity partners.
While the potential investment is getting plenty of media buzz, Morgan is downplaying the likelihood the firm will reach a deal. In an interview with the Financial Times, he said private equity investors are not going to want lawyers to take their money “and just put it in our pockets.” Instead, they will want the firm to invest in growth. “I don’t get along well with private equity, because I don’t like usury rates,” Morgan said in the interview.
Why Law Firms Are Considering Private Equity
Private equity capital, however, would allow the firm to expand even farther. Morgan told the Financial Times that he started working with bankers when he saw other firms taking on outside investments through a managed services organization (MSO) structure. “We’ve got to see how it works,” Morgan said in the interview. “The real question with the MSO is, what are you going to do with the funds?”
An Array of Deals
As firms have created new business structures, private equity players have been anxious to invest. Personal injury firms, with their largely recession-proof business models and manageable sizes, are particular favorites for private equity investors, although corporate-focused firms are discussing and doing deals as well.
For their part, law firms are increasingly willing to listen, especially in light of intense pricing pressure from clients and potentially unprecedented capital expenditures needed to add artificial intelligence capabilities.
Here’s a sampling of the activity:
- In May 2026, Los Angeles-based deals boutique Massumi & Consoli reached an investment agreement with Dallas-based PE firm Trive Capital to “improve the firm’s technology with artificial intelligence capabilities,” Bloomberg reported. According to Bloomberg, the deal terms were not disclosed, but Massumi has created a separate MSO-style company to handle the firm’s administrative functions.
- Louisiana-based personal injury firm Dudley Debosier signed a deal in January of the same year with Uplift Investors, a private-equity firm, to spin off its technology, finance and other administrative and back-office assets into a new MSO, Orion Legal, that will be jointly owned by the two.
- Hughes & Coleman, a personal injury firm in Kentucky and Tennessee, announced in May that it would also become a partner in the Orion Legal MSO. “The MSO model represents a major step forward, leveraging scale to invest in operational support so lawyers can concentrate on delivering the highest-quality legal work on behalf of clients,” Lee Coleman, a name partner at the law firm, said in a press release.
- In 2025, according to media reports, New York’s Cohen & Gresser was in talks with private equity investors for a reportedly $40 million investment. And global firm McDermott Will & Schulte has been exploring outside investment, although a deal could take some time, according to the firm.
State Prohibitions
The surge in investment activity has spurred lawmakers in some states to start placing limits on investors and law firms.
In Colorado, lawmakers passed and the governor signed the Colorado Legal Practice Integrity and Fee-sharing Prohibition Act, which posits that “even minimal nonlawyer ownership or profit participation in law firms compromises public trust in the legal profession; alternative business structures have increasingly been used to circumvent longstanding prohibitions on nonlawyer ownership of law firms and the concomitant sharing of attorney fees.”
According to an analysis of the legislation by Holland & Knight, the new law would “effectively bar [alternative business structures] from participation in Colorado legal services.” MSOs would be regulated as well. Any compensation paid to an MSO must not be based upon legal fees, revenues, profits, recoveries, settlements or case outcomes. “Flat‑fee and hourly arrangements remain permissible,” Holland & Knight wrote. “But percentage‑based or success‑based compensation structures would be barred.”
Illinois and Other States Consider Similar Restrictions
In Illinois, state legislators voted to prohibit nonlawyer entities from charging a law firm fees, controlling its hiring, revealing client documents, or interfering with lawyers’ professional judgment. Fee sharing with alternative business structures was limited as well.
In an article on the new law on the firm’s website, Dykema partner Evan Atkinson wrote that the Illinois legislation “may become an early test case for how legislatures and regulators respond to the growing commercialization of legal services. If the legislation proves effective—or politically popular—it would not be surprising to see similar proposals emerge in other jurisdictions.” As Atkinson noted, comparable legislation is currently advancing through the California legislature.
What MSOs Do
Under MSO structures, law firm operations are placed in separate business entities. Services that require a lawyer and that are paid through legal fees are housed in one business entity (i.e., a traditional law firm). Non-legal services and administrative and back-office operations are housed in another entity, a managed services organization. The firm then pays the MSO for the services it provides.
Any outside investment or ownership occurs through the MSO. As DLA Piper noted, the MSO is a “tried-and-true model that has been used for years in many other types of professional practices (e.g., medical, dental, veterinary).”
Navigating ABA Fee-Sharing Rules
An MSO can help firms avoid violating the American Bar Association’s Model Rule 5.4, which has been adopted in most U.S. locales. The rule states that “a lawyer or law firm shall not share legal fees with a nonlawyer.” In addition, lawyers “shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law,” the rule states.
Some jurisdictions are experimenting with allowing nonlawyers to directly invest in legal businesses, however. Arizona, since 2021, has given law firms the ability to adopt an “alternative business structure” (ABS), which gives nonlawyers the right to own shares in a law firm. Utah has also created a “regulatory sandbox” to allow for greater experimentation with law firm business models.
International Markets
Outside ownership and investment in law firms is allowed in certain international markets.
The U.K. parliament, for instance, enabled outside investment via the Legal Services Act of 2007. England and Wales followed up, authorizing regulator-licensed alternative business structures more than a decade ago. As a result, in the second half of the 2010s, a series of U.K. firms—Gateley, Knights Group, Keystone Law and DWF—went public. (DWF was acquired by private equity investors in 2023 and has again gone private.)
Australia’s Publicly Traded Law Firm Experiment
In Australia, nonlawyer ownership of firms stretches back more than 20 years. Australia’s Corporations Act allows law firms to form as standard companies using a structure known as an incorporated legal practice (ILP). An ILP can provide legal and non-legal services and may operate with nonlawyer directors.
In 2007, Slater & Gordon, an Australian plaintiffs’ firm, broke ground as the first law firm in the world to go public. As one law firm consultant described it, Slater’s journey has been “turbulent.” Like DWF in the U.K., Slater has since been acquired by a private equity firm and has been delisted from the Australian Stock Exchange.
While no single national body oversees legal professionals in the U.K. or Australia, both have a far more centralized regulatory approach than the United States. That has made it easier for proponents to change the rules on outside investment. By contrast, regulation and oversight of the U.S. legal profession generally falls to the highest appellate court in individual states and efforts to nationalize lawyer regulation have been fiercely opposed by the American Bar Association and others.
Alternative Paths
While U.S. regulators may look for ways to slow or limit outside investment, law firms are unlikely anytime soon to halt the search for capital to fuel growth and innovation. That is especially true for midsize and smaller firms, where an agreement with a private equity investor may be more desirable than merging with a larger firm or asking a small group of equity partners to kick in more capital.
Big firms, on the other hand, may prefer to chart their own path. As one Big Law partner told Law.com last year, even if the firm needs cash, “who’s going to give away control?” Large firms are continuing to bolt on smaller firms or practice groups to increase scale and revenue and the law firm merger market remains relatively frothy.
As we noted in December, 2025 saw a flurry of major law firm mergers and acquisitions—and the legal market appeared ripe for a strong round of firm combinations this year as well. A forecast by Citi Hildebrandt found that 1 in 5 large firms considered some form of acquisition likely.
The predictions appear to have been accurate. On June 1, 2026, Winston & Strawn and Taylor Wessing finalized their transatlantic combination and Perkins Coie and Ashurst are expected to complete their merger on July 1.
Also in July, Cadwalader and Hogan Lovells are expected to begin combined operations, following the biggest-ever law firm merger. According to Bloomberg, revenue for the new, 3,100-lawyer firm is expected to hit $3.6 billion, taking a place among the world’s top five largest firms. With that kind of scale, private equity investment may seem beside the point.
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David L. Brown is a legal affairs writer and consultant, who has served as head of editorial at ALM Media, editor-in-chief of The National Law Journal and Legal Times and executive editor of The American Lawyer. He consults on thought leadership strategy and creates in-depth content for legal industry clients and works closely with Best Law Firms as senior content consultant.