States Consider Bans on Private Equity Law Firm Acquisitions

Legal ethics attorney Trisha Rich was cited in a Wall Street Journal article about proposed legislation in California, Illinois and Colorado that would restrict private equity investment and other forms of nonlawyer ownership in law firms. The article examined the growing use of management services organizations (MSOs) as a structure for outside investment in legal practices and the broader debate over whether such capital will benefit or undermine the profession. Ms. Rich, who regularly advises on MSO transactions, noted the increasing pace of investor activity and speculated that some of the legislative pushback stems from competition for funding sources.

"[Supporters of the bills] say the goal is to protect the public, but they're really worried about their competitors' getting access to capital," she said.

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