A new strategic regulatory advice service has been launched by Kingsley Napley to assist investors entering the legal market.
- The service is aimed at private equity firms and other investors looking at the UK and international legal arenas.
- The consultancy, named Stratify, is led by Iain Miller and includes experienced consultant Crispin Passmore.
- There is a growing interest and activity in external investments in law firms, both in the UK and internationally.
- Stratify intends to guide clients on regulatory structures and risk management to achieve business goals.
Kingsley Napley, a prominent City law firm, has announced the creation of Stratify, a consultancy designed to offer strategic regulatory advice to entities interested in the legal market. This move aims to cater to the increasing curiosity of private equity firms and other investors targeting the UK and global legal industries. As external investment accelerates within the legal sector, evidenced by numerous recent announcements, Stratify is poised to provide vital guidance.
The consultancy is spearheaded by Iain Miller, a partner known for his profound knowledge in legal regulation. He is joined by senior consultant Crispin Passmore, who brings his expertise from his roles as director at both the Legal Services Board and Solicitors Regulation Authority, along with the experience from his own consultancy which is now integrated with Stratify. Mr Passmore has played a significant role in advising alternative business structures that have emerged recently, particularly focusing on the slow transition of the US market towards allowing external investments in law firms.
Miller, who leads Kingsley Napley’s legal services regulatory team, noted the evolving regulatory frameworks in the UK and internationally, contributing to the diversification of traditional business models and increasing the demand for strategic regulatory counsel. The firm already advises a varied clientele including private equity firms, US law firms, and tech startups on the regulatory intricacies of the UK legal market, alongside assisting existing law firms considering structural adjustments.
Passmore emphasized the timely nature of Stratify’s services, pointing out the necessity for funders and new market entrants to comprehend the regulatory environments. Meanwhile, existing law firm leaders are exploring smarter business structuring options to align with regulatory changes, applicable not just in the UK but also in the US and other international markets.
The legal industry is experiencing unprecedented transformation with significant investment opportunities arising, as reflected in recent acquisitions such as a finance-focused professional services business acquiring a Surrey law firm for £6.1 million. This follows another private equity entity entering the sector with the purchase of a Midlands law firm, and a Gulf sovereign wealth fund’s investment in a Leeds-based alternative business structure.
Passmore predicts a steady stream of investment deals, highlighting the growing sophistication in how law firms and investors perceive investment opportunities. Successful examples have demonstrated the stability and growth potential of well-managed firms, protected by market liberalisation. Firms aiming for investment readiness are focusing on robust governance, clearer growth strategies, and effective capital deployment.
He also pointed out the potential of artificial intelligence to significantly boost productivity in law firms, disrupting traditional models. Despite common myths about private equity, it often provides patient capital, crucial for firms undergoing transformation. The influx of new providers, backed by major investors, is setting new standards in the legal sector, with notable firms like Fletchers and Stowe establishing examples for others.
Stratify’s launch positions it as a key advisor amidst the evolving landscape of legal market investments, offering expert regulatory guidance.
