How AI Is Powering New Law Firm Structures
Private Equity attorney Joshua Porte was quoted in a Financial Times article on the rise of management services organization (MSO) structures in the U.S. legal market and their role in supporting the growth of artificial intelligence (AI)-native law firms and other alternative business models. The article examined how the MSO structure enables outside investors, including private equity and venture capital groups, to fund law firm operations by separating legal casework from back-office functions and technology. This setup allows nonlawyer ownership of the "business of law" while complying with strict legal ethics and professional responsibility rules that prohibit nonlawyers from owning stakes in the "practice of law." Mr. Porte noted that investor interest in the MSO model has grown alongside advances in generative AI and that it has gained momentum as firms explore new, technology-enabled approaches to delivering legal services.
"The model is precision-engineered [for AI-native firms]," he said. "It contemplates this really strong relationship between the business people, and the software and the technologists, with the lawyers – and you can design that environment from the ground up."