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McDermott Will & Schulte and Private Capital: What It Means for Smaller Law Firms

Big shifts may be underway in how law firms are financed and structured, and that matters for buyers of smaller practices everywhere. The legal industry has long resisted private capital and non-lawyer ownership due to ethical restrictions that prevent outside parties from owning law firms directly. But recent developments at one of the largest U.S. firms could signal a change in the landscape. McDermott Will & Schulte, the new global powerhouse formed by the merger of McDermott Will & Emery and Schulte Roth & Zabel, is publicly exploring the possibility of selling a stake to outside investors under a managed services structure—a novel approach that separates lawyer ownership from back-office services so investors can participate without violating ownership rules. This exploratory discussion is preliminary, but even the possibility is significant for the future of law firm investment. Why This Matters: Breaking the Traditional Ownership Model In most U.S. jurisdictions, ethics rules require that law firms remain owned by licensed lawyers. Non-lawyer investment that touches legal fees is prohibited by ABA Rule 5.4, making direct private equity stakes in law firms difficult or impossible under standard structures. While some stats like Arizona have loosened their rules for non-lawyer ownership, it will take a while to see if this trend spreads to other jurisdictions. The managed services organization (MSO) approach under consideration for McDermott’s deal would create two businesses: a lawyer-owned entity that provides legal services and a separate MSO that handles back-office functions. Investors could take a financial stake in the MSO and share in revenues tied to administrative services paid for by the law firm. If it happens, such a transaction could be a watershed moment not just for Big Law, but for firms of all sizes that are navigating succession, acquisition, and growth amid evolving capital options. What the McDermott Talks Signal for Buyers Even though the discussions are early and no deal is finalized, the conversation itself signals a few broader trends that buyers should pay attention to: Increasing openness to alternative capital solutions. Firms may be more willing to explore models beyond partner capital to fund growth, tech investment, and succession liquidity. Potential model validation. If a large law firm can structure investment deals without ethical conflict, it could accelerate similar conversations across the industry. Pressure on smaller firms. Buyers and sellers at the mid-market level may find themselves competing with better-capitalized platforms or having to demonstrate why independent practice is still attractive. Private Capital, MSOs, and the Legal Market: A Primer Private capital refers to investments from non-public sources such as private equity firms, family offices, or strategic investors. In many industries, private capital fuels expansion, technology upgrades, acquisitions, and professionalization. In law, that standard model has been constrained by professional regulations. An MSO (Managed Services Organization) is a structure used in other professional fields (like healthcare and accounting) to separate non-legal functions—billing, HR, technology, facilities—from legal practice. Investors can own part of an MSO and share in the revenues generated by the services it provides to the law firm, without directly owning or controlling legal work. While this structure still presents challenges, it’s one of the few models that can comply with regulatory prohibitions on non-lawyer ownership while bringing outside capital into the ecosystem. What Smaller Firm Buyers Can Take Away Whether you are acquiring a solo or small firm, merging a platform, or scaling a multi-office practice, several themes emerge from the McDermott situation that are relevant to your strategy. Private Capital Isn’t Just for Big Firms If MSO deals or similar structures gain traction at the largest firms, smaller practices could eventually adopt similar models, accessing capital to support growth, succession, technology investments, or lateral recruiting. These options may be especially relevant for firms that: Need liquidity for retiring partners Want to invest in tech or operations to remain competitive Seek strategic scale through acquisitions or mergers Buyers Should Know Their Financing Options Traditional acquisition financing has typically meant seller financing, partner capital, or bank debt. But a future with private capital alternatives could give buyers extra leverage or flexibility, particularly when seller expectations around price or timing are misaligned with buyer resources. Operational Strength Matters More Than Ever Capital is more likely to flow toward law firms with: Clean financials Documented systems and processes Diversified revenue streams Clear client retention strategies Buyers who can clearly articulate and improve operational efficiency post-acquisition are more attractive to investors and more likely to realize long-term value. Deal Structures in a Changing Capital Environment Even without widespread private equity accessibility, firms are experimenting with structures that balance capital needs with regulatory restrictions. Buyers should familiarize themselves with ways deals can be structured, including: Seller financing: The seller carries part of the purchase price, tying payment to future performance. Earn-outs: A portion of price is paid based on revenue retention or client continuity post-close. Phased transitions: Sellers stay on in advisory roles during client and staff transition periods. MSO-linked capital: Back-office revenues are monetized through separate entities that accept outside investment. Each structure has advantages and risks, and each depends on the specific circumstances of the firms involved. Looking Ahead: What This Could Mean for the Market If McDermott or another large firm successfully structures outside investment, it could catalyze broader acceptance of alternative capital strategies across the legal industry, from large firms down through mid-market and boutique practices. Over time, that could lead to: More capital availability for acquisitions and growth Greater professionalization of operations Wider acceptance of hybrid ownership models A more dynamic market for law firm mergers and acquisitions For buyers willing to stay educated, strategic, and adaptable, this evolving landscape represents not just change, but opportunity. Contact  The Law Practice Exchange today to learn more about private equity and what a potential sale could mean for your law firm.

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How Buyers Can Capitalize on the “Greying” of the Legal Industry and Acquire a Law Firm

If you’re exploring a law firm acquisition, you’re not just shopping for a book of business. You’re stepping into a market shaped by a powerful demographic reality: law firm owners are getting older, and many are delaying retirement. For buyers, that “greying” trend creates both risk and opportunity. Risk, because older owner-dependence can make practices fragile without a strong transition plan. Opportunity, because motivated sellers, succession gaps, and client continuity needs can open doors to acquire strong practices, often with meaningful upside if you know how to evaluate (and structure) the deal. Below is what buyers should understand about the aging legal workforce, how the “Great Wealth Transfer” connects to law firm acquisition, and why having a specialized advisor matters—not only for the financial and operational details, but for the emotional realities that often drive retirement decisions. The “Greying” of Law Firms: Key Statistics Buyers Should Know The legal profession skews older than many other occupations. The American Bar Association’s demographics chapter reports that the median age of lawyers was 46 in 2023, compared with 42.1 for all U.S. workers. That same ABA data shows that 17.9% of lawyers are ages 55–64 and 13.1% are 65+—meaning 31% of lawyers are 55 or older. This matters for buyers because many small and mid-sized firms are led by owner-attorneys who have built decades of client relationships and may now be thinking about succession (even if they haven’t said it out loud yet). At the same time, the broader economy also points in the same direction: older Americans are working longer. Pew Research Center reports that 19% of Americans ages 65+ were employed in 2023, nearly double the share from 35 years earlier. Why the “Greying” Trend Creates a Buyer Opportunity When a large share of owners are nearing retirement age, the market often experiences: More potential sellers (including owners who never planned to sell, but now need a plan) More urgency driven by health, burnout, staffing constraints, or family needs More succession gaps (no internal successor, or associates unwilling/unable to buy) More openness to creative deal structures (phased exits, earn-outs, mergers, partial sales) For buyers, this can be a window to acquire firms that have strong reputations, stable client bases, and reliable cash flow—but are under-optimized operationally or overly dependent on the founder. If you can professionalize systems and retain clients through a thoughtful transition, the upside can be significant. The Great Wealth Transfer: Why It Matters to Law Firm Buyers The “greying” of law firm owners is happening alongside the Great Wealth Transfer, and that convergence has implications for acquisition strategy. Cerulli Associates projects that $84.4 trillion in wealth will be transferred in the U.S. through 2045, including $72.6 trillion to heirs and $11.9 trillion to charity. Cerulli also estimates that more than $53 trillion of that total is expected to transfer from Baby Boomer households, representing 63% of all transfers. Why does this matter for law firm buyers? Demand shifts: Estate planning, probate, trust administration, and wealth-adjacent services may see sustained demand as assets move between generations. Client continuity becomes mission-critical: Wealth transfer moments often involve family-wide decisions, and relationships can change quickly if service quality slips during an ownership transition. Professionalization is rewarded: Buyers who can modernize client experience, communication, and operations may retain more multi-generational relationships. In other words, the Great Wealth Transfer isn’t just a macroeconomic headline. For the right buyer, it can influence which practice areas to prioritize and how to build a durable post-acquisition growth plan. What Buyers Should Watch For in a “Greying” Seller-Owned Firm Older ownership does not automatically mean higher risk, but it often correlates with specific deal realities. Here are the most common buyer-sensitive areas to diligence. Founder (Owner) Dependence Ask: “If the owner steps back, what stays?” Are top clients loyal to the firm or to the founder personally? Who handles key communications and decision-making? Are there other attorneys positioned as trusted advisors to clients? High founder dependence can still be acquired, but it typically requires a longer transition period, a structured client handoff, and careful alignment on post-close roles. Practice Mix and Client Concentration Not all revenue is equally transferable. Is revenue recurring or episodic? How concentrated is the top 10 client list? Are there referral pipelines that depend on the owner’s personal network? For buyers, concentrated or personality-driven revenue isn’t necessarily a deal-breaker—it’s a pricing and structure issue. Operational Maturity (or Lack Thereof) Many founder-run firms operate successfully for years with informal systems. Buyers should assess: Case management and documentation standards Billing discipline and collections (AR aging, write-down practices) Existing legaltech stack and data security Trust accounting processes and controls Staff roles, retention risk, and “single point of failure” dependencies Operational cleanup can be a major value-creation lever post-close, but only if you budget time, attention, and leadership capacity to execute the change. Seller Readiness and Emotional Reality Retirement is rarely purely rational. Many owners feel responsible for clients, staff, and legacy—and may fear being “replaced” or losing identity. That emotional layer can show up as: Hesitation to share information Shifting expectations mid-process Difficulty committing to a timeline Sensitivity about firm culture, staff, or brand For buyers, recognizing this is not just empathy, it’s strategy. Deals close faster and integrate better when sellers feel understood and respected. How the “Greying” Trend Shapes Deal Structure In many acquisitions involving retiring owners, the best outcomes come from structure — not pressure. Common structures buyers may consider include: Phased transitions: Seller remains for a defined period to transfer relationships and mentor. Earn-outs tied to retention: Aligns purchase price with client continuity outcomes. Partial sales or equity rollovers: Seller reduces ownership gradually while buyer takes over operations. Merger-style integration: When culture and brand continuity matter deeply to the seller. The “right” structure depends on the practice type, client base, staffing, and seller motivations, which is why experienced guidance matters. Why Buyers Need an Advisor Who Understands the Financial, Operational, and Emotional Side Law firm acquisitions are not ordinary small business transactions.

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How Loved Ones Can Support Retired Attorneys: A Guide for Spouses, Children, and Families

Retirement is a major milestone for any professional, but for attorneys who have owned and operated their own law firms, it can be uniquely complex. A law practice is rarely just a job. It is often a decades-long investment of time, intellect, reputation, and personal identity. For retiring lawyers, the role of loved ones—including spouses, partners, children, and close family members—can be critical. These individuals often serve as trusted advisors, emotional anchors, and practical support systems during one of the most consequential transitions of a lawyer’s life. There is no one-size-fits-all approach. Families differ. Firms differ. Personal goals differ. But when loved ones understand the pressures retiring attorneys face and the many ways they can help, the transition becomes more thoughtful, less stressful, and far more intentional. Why Retirement Is Especially Complex for Law Firm Owners Many attorneys don’t simply retire from a position—they exit a business they built. This distinction matters. Retirement may involve: Negotiating the sale, merger, or succession of the firm Protecting long-standing client relationships Ensuring ethical compliance around files, trust accounts, and client communication Considering the livelihoods of staff and junior attorneys Reconciling personal identity with stepping away from daily practice Because these decisions often combine financial, professional, and emotional considerations, loved ones frequently become sounding boards, whether formally or informally. The Emotional Side of Retirement: How Loved Ones Can Help While retirement planning is often framed as a financial or business exercise, the emotional side is just as significant. Attorneys may experience excitement and relief alongside fear, uncertainty, or grief. Many lawyers have spent decades being relied upon for answers. Retirement can challenge that sense of purpose. Providing Emotional Stability and Perspective Spouses, partners, and family members can provide grounding support by: Listening without immediately trying to “fix” concerns Normalizing mixed emotions about stepping away Helping the attorney see retirement as an evolution rather than a loss Supporting them as they fill the void of their firm, whether that’s through a gradual transition away from work or keeping them busy with their newfound free time Sometimes the most valuable support is simply patience, allowing the attorney to work through the transition at their own pace. The Role of Spouses and Partners: Often the Closest Advisors Spouses and long-term partners are frequently the most involved supporters during retirement. In many law firms, they may already have a working knowledge of the business, finances, or daily pressures of practice. When the Spouse Is Involved in the Firm In some cases, a spouse or partner plays an active role in the firm—handling bookkeeping, payroll, HR, marketing, or administrative operations. This involvement creates a unique vantage point. These spouses may help by: Organizing financial and operational information for advisors Identifying inefficiencies or risks that could affect valuation Helping prepare for due diligence during a sale or merger Understanding how their own role will change alongside their spouse They often understand both the business realities and the personal stakes, making their input especially valuable. When the Spouse Is Not Involved in the Business Even without direct involvement, spouses can provide critical perspective. Being outside the day-to-day operations can be an advantage. They may support retirement planning by: Helping define shared lifestyle goals post-retirement Asking clarifying questions about timing, risk, and income needs Encouraging balance between professional obligations and personal well-being In many cases, spouses help retiring attorneys see beyond the firm and focus on the next chapter of life together. The Role of Children: A Wide Spectrum of Involvement Children of law firm owners occupy a wide range of roles, from deeply involved to entirely separate. Each scenario comes with unique considerations. When Children Work in the Firm Some children are attorneys in the firm or play operational roles. Others may be lawyers elsewhere who understand the profession but not the specific practice. In these cases, children may help by: Participating in early succession conversations Providing insight into whether internal transition is viable Helping bridge generational expectations around leadership and culture Clear communication is essential. Retirement planning should not rely on assumptions about interest, readiness, or obligation. And if a child is potentially interested in taking on a firm from an aging parent, it’s still important to have an objective advisor involved to ensure feelings don’t get in the way. When Children Are Lawyers but Not in the Firm Children who are attorneys but not part of the practice often bring valuable outside perspective. They may understand market realities, client expectations, and modern firm structures. They can support retiring parents by: Offering a second opinion on transition options Helping evaluate offers or succession structures Acting as a neutral sounding board without direct business involvement When Children Are Not Lawyers and Not Involved Many children have no desire to be involved in the firm, and that is completely appropriate. Their support often looks different but remains meaningful. They may help by: Encouraging proactive planning rather than reactive decisions Helping parents envision a fulfilling post-retirement life Ensuring alignment between business decisions and estate planning In some families, children play a key role in reminding retiring attorneys that quality of life matters as much as professional legacy. Non-lawyer children can even have a stake in their parent’s business through different deal structures, including MSOs and private equity investments that allow for operational support. Helping Retired Attorneys Define “What Retirement Looks Like” One of the hardest aspects of retirement is not the exit itself, but the uncertainty of what comes next. Loved ones can help shift the conversation from fear to possibility. Helpful questions include: What does an ideal week look like after stepping away? Is there interest in mentoring, consulting, or teaching? How much ongoing involvement feels healthy and energizing? These discussions help retiring attorneys see retirement as a redefinition of purpose rather than an absence of it. Supporting Negotiations and Big Decisions Without Overstepping Some loved ones take an active role in negotiations by reviewing offers, helping prepare questions, or organizing information. Others provide quiet emotional support. Both approaches can be

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Being a “Deal Therapist”: What Older Attorneys Need to Hear About Legacy and Letting Go

There’s a phrase I use, sometimes half-jokingly and sometimes quite seriously, when working with seasoned law firm owners preparing for transition: I’m not just a deal advisor, I’m a deal therapist. At first blush, that sounds like a quip. But after walking hundreds of lawyers through the process of selling, succession planning, and exit strategy over the past decade, I can tell you this: the emotional landscape of transitioning a law practice matters just as much as the financials. Why Transition Feels So Personal for Older Attorneys To many long-time practitioners, the firm is their legacy. It reflects every late night, every tough call with a client, and every argument won in court or at the negotiating table. Letting go of the reins often means confronting deeply personal questions. Who will carry forward the standards I’ve upheld? Will my clients be cared for the way I would care for them? What will I do if I’m no longer needed in the way I once was? Many attorneys delay transition planning not because they lack incentive, but because they have not acknowledged the emotional cost of letting go. They worry about loss of control, loss of purpose, and loss of identity. That worry is real, and it deserves acknowledgement rather than dismissal. Legacy Is About More Than a Balance Sheet When I sit down with a senior lawyer contemplating exit, our first conversations are rarely about valuation multiples. Instead, they focus on the story behind the firm: how it started, whom it has served, and what it means to them personally. One retired partner once told me, “I built this with nothing but a hope and a law degree. If I can’t be here to protect it, who will?” Another said, “I’ve practiced law since I graduated. When I stop, who am I?” These are not superficial anxieties. They are fundamental human questions. Accepting that reality is not weakness. It is wisdom. Transition Is a Psychological Journey as Much as a Transaction Too often, the marketplace speaks only in numbers: revenue, multiples, EBITDA, and comps. These matter. They influence price and structure. But if you are not prepared emotionally for a transition, the numbers alone will not make the process smoother. I have seen this across firm sizes. A solo estate planner delayed succession planning until after a valuation because she was not ready to face the idea of stepping away. A managing partner at a larger firm nearly derailed a deal because diligence questions felt like personal criticism. In every case, emotional readiness proved just as pivotal to success as financial readiness. This is why I often find myself providing support that goes beyond traditional deal mechanics. Deal therapy is not about psychoanalysis. It is about presence, validation, and helping firm owners reframe identity beyond daily practice. Reframing the Narrative of Letting Go Here is one of the hardest truths for many attorneys to hear. Selling or transitioning a firm does not erase your legacy. It extends it. Legacy is not a snapshot of today’s revenue or a list of clients. It is continuity. It means clients continue to be served, values live on in the culture, and the firm’s contribution to the profession endures. One client told me shortly after closing, “I thought I was ending everything. I finally realized I was beginning something else.” He did not disappear from the profession. He became a mentor, joined nonprofit boards, and took on pro bono work he had postponed for years. For older attorneys, letting go is not about absence. It is about choice. Emotional Readiness Drives Better Outcomes Here is what we have learned working with lawyers at every stage of transition: emotional readiness is not optional. It is essential. Before the first conversation about offers or terms, the most successful transitions begin with honest self-reflection. Am I ready to relinquish operational control? Do I trust my successor or successors? What does my post-law career look like, and am I comfortable with it? Law firm owners who take time with these questions tend to experience smoother negotiations, stronger relationships with buyers or successors, and faster closings. They do not see diligence as a personal judgment, but as a necessary and healthy part of the process. Supporting the Transition Practically and Emotionally At The Law Practice Exchange, we approach transitions with both rigor and empathy. We begin with candid assessment, addressing both financials and mindset. We help separate identity from enterprise. We reframe transition as continuation rather than abandonment. We provide guidance throughout the process, from valuation to close. This approach is not abstract or theoretical. It leads to better deals, fewer regrets, and legacies that endure. Letting Go Isn’t Losing—it’s Leading Forward To every seasoned attorney wondering whether it is time, I offer this perspective. You do not stop being a lawyer because you sell your practice. You stop practicing law in the way you always have. That change can create space for a more intentional and fulfilling next chapter. Even if you aren’t ready to let go yet, putting off initial conversations could be one of the worst decisions you make. Exiting—or, at the very least, planning your exit—puts you in the driver’s seat. Don’t let life make these hard choices on your behalf. Ready to take the next step? Schedule a call with us at LPE or take a look at our resources. Our team of deal therapists are here to help older attorneys navigate their transition from start to finish. Let’s get your retirement started on the right foot.

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The Great Law Firm Transition: How Baby Boomer Attorneys Can Exit on Their Own Terms

For many baby boomer attorneys, retirement doesn’t look like a hard stop. It often looks like slowing down, shifting the work they take on, or waiting for the right moment to hand off clients and step away. That’s understandable. Law is personal—your relationships, reputation, and identity are wrapped into the firm you built, and you deserve to define what your legacy looks like. But the legal profession is also undeniably “greying,” and postponing a transition can create real consequences for clients, staff, valuation, and your own peace of mind. Let’s take a closer look at what that means for the industry as a whole…and your retirement. The “Greying” of Law Firms: What the Data Says The legal profession skews older than many other occupations. According to the American Bar Association’s Profile of the Legal Profession, there are over 1.3 million active lawyers in the U.S., with a notable share in the later stages of their careers. The median age of lawyers was 46 in 2023, compared with 42.1 for all U.S. workers. Lawyers age 55 and older make up a meaningful portion of the profession, signaling that many are delaying full retirement and staying active in practice well into what were traditionally retirement years. That “older-and-staying” pattern isn’t unique to law. Across the broader workforce, a higher share of older Americans are working than in past decades: about 19% of adults 65+ are employed today, up from 11% in 1987, according to Pew Research Center. And when older Americans do keep working, many move toward flexibility. Recent statistics from the Bureau of Labor state that 38.3% of employed people age 65+ worked part time in 2024. Why Lawyers Delay Retirement (and Why it’s Different in Law) Baby boomers delay retirement for familiar reasons: financial uncertainty, rising costs, and longer life expectancy. But lawyers also face profession-specific challenges: Client relationships are sticky. Clients often “hire the lawyer,” not the firm. Your practice may be your retirement plan. The firm’s value is real, but only if it’s transferable. Ethical duties remain. File custody, client protection, and trust accounting obligations continue whether you’re working or planning an exit. The Risks of Waiting Too Long Delaying your exit doesn’t just postpone your next chapter—it can quietly erode the options you’ll have later. Valuation drops. A practice overly dependent on one person is harder to sell. Clients get nervous. If clients sense uncertainty, they may switch counsel early. Staff instability increases. Good people want clarity and a path forward. Emergency transitions are costly. Illness or unexpected events can force rushed decisions. The good news: most of these risks are preventable with a proactive plan and timeline. We often encourage baby boomer attorneys to think about their exit plan at least five to ten years ahead of time, allowing you to make key decisions about your legacy before life makes them on your behalf. Actionable Tips for Baby Boomer Attorneys Planning Retirement Pick a Retirement Model, Not Just a Date Many attorneys benefit from a phased retirement approach. This could look like stepping down from certain cases, reducing hours, or moving into mentorship roles. Older workers often reduce hours or shift to part-time work as they age, reflecting broader labor trends. Try this: Define “Phase 1 / Phase 2 / Phase 3” transition plans over 12–36 months, even if dates shift later. Turn Your Book of Business into a Transferable Asset The goal is to make your client relationships bigger than one individual. It’s not too late to start decoupling yourself from your firm’s brand, and it’s not required if you want to secure a sale. However, we recommend: Add a second attorney to key matters with real responsibility. Introduce clients to the next-gen attorney as part of continuity. Document client knowledge (preferences, decision makers, billing sensitivities). Taking a week-long break from your firm (and yes, that means really unplugging) to see if and how things run without you, exposing potential weaknesses Build a Succession Plan that Protects Clients and Family Succession planning protects clients and colleagues in case of disability or death. It should include access to client data, passwords, liabilities, and instructions for a successor. (Resources from professional responsibility committees like the ABA can guide this.) Try this: Create a one-page “succession binder index” (digital and printed) that says where everything is and who can access it. Clean Up Operations to Improve Valuation and Reduce Buyer Anxiety Both internal and external buyers pay more for clarity. Consider standardizing engagement letters, confirming clean trust accounting practices, ensuring matters are visible in your case management system, and reducing reliance on a single staff “gatekeeper.” Decide What “Legacy” Means to You, Then Align the Exit Plan Legacy can mean continuing the firm name and culture, protecting staff jobs, preserving client service quality, or monetizing what you built for your family. The clarity you gain in defining your legacy determines whether you pursue internal succession, a merger, a practice sale, or a planned wind-down. If you have loved ones who have been by your side as you built your practice, involve them as decision-makers if it feels right. You can also lean on them for support on the more emotional aspects of exiting. 6) Don’t Wait to Talk to Clients—Script It Most retirement transitions fail because attorneys avoid conversations until it feels urgent. A simple, empathetic script can help: “I’m building a continuity plan so you’re always supported. You’ll start seeing more of [Name], who is excellent at [X]. I’m still involved, and this strengthens the bench for your matters.” This instills confidence while ensuring a smooth transition. Your clients already have a deep trust in you, and your endorsement of a successor will put them at ease while you figure out next steps. Why Planning Matters Now The combination of an aging profession and broader trends toward extended workforce participation means more attorneys will be navigating retirement decisions simultaneously. Treating succession as a business strategy—not a last-minute necessity—positions you to exit on your own terms, protect

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