For Burford Capital, MSOs Represent a New Form of Law Firm Investment

Legal ethics attorneys Trisha Rich, Joshua Porte and Leonard Brahin were cited in an American Lawyer article on increased private equity interest in the U.S. legal market. Litigation finance giant Burford Capital is the latest company announcing plans to invest in U.S. law firms, and it is turning to management services organizations (MSOs) as a workaround to avoid violating prohibitions on nonlawyer ownership of firms. Under an MSO structure, the MSO handles back-office tasks such as billing that are not directly connected to the practice of law and performs these services for a fee. The article cited an alert published by Ms. Rich, Mr. Porte and Mr. Brahin on law firms MSOs. In the alert, the authors explained how MSOs can not only ease the burden on lawyers by taking over non-legal aspects of their jobs but also promote innovation, such as providing capital for technology infrastructure and cybersecurity upgrades.

"MSOs are often able to better take advantage of economies of scale to provide the practice with a heightened level of expertise, and to help the practice obtain better results at lower cost," they wrote.

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