Private Equity Woos Personal Injury Law Firms with Profits, Tech

Legal ethics attorney Trisha Rich and private equity attorney Joshua Porte were quoted in a Bloomberg Law article examining the surge of private equity investment in personal injury law firms and the growing use of management services organizations (MSOs) to facilitate these transactions. The article explored how MSO structures allow outside capital to enter the legal market by separating business operations from the practice of law, enabling firms to scale and compete more aggressively while addressing ethical and regulatory considerations around lawyer independence and fee-sharing restrictions.

Mr. Porte explained how investors evaluate these firms from a commercial perspective: "When you are driving on the interstate and you see billboard after billboard, almost all of them are ads for personal injury firms. Private equity looks at that and says, 'It's a marketing business. I know how to partner with a marketing business and increase market share.'"

Ms. Rich shared how emerging legislation interacts with the MSO model, observing that "legislators are trying to codify the lawyer independence principle. A properly structured and managed MSO should fit properly within the legislation as currently drafted."

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