Our review of M&A involving UK based legal practices in 2024 showed considerable activity, with total transaction volume increasing by 25% in comparison to 2023.
Acquisitions of lower to mid-market law firms continued to dominate M&A activity, particularly in respect of trade buyers looking for strategic acquisitions in order to expand geographically, enhance service line offerings or capitalise on the benefits of scale. There was also continued interest from private equity in the legal sector, amid a continued focus on the wider professional services sector (dominated at present by deals in the accountancy sector). Lawfront Group, backed by Blixt Group, acquired Manchester headquartered full-service law firm Slater Heelis. Fletchers Solicitors, backed by Sun European Partners, continued its bolt-on strategy with the acquisition of Serious Injury Law during in 2024 as well as the acquisition of Scott Rees & Co Solicitors in early 2025. Horizon Capital committed £30 million to fund the acquisition of FBC Manby Bowdler, being the first acquisition of Adeptio Law Group. The exit by Livingbridge of its investment in Stowe Family Law to the Bahrain based private equity group Investcorp demonstrates the returns that can be made under private equity ownership.
The UK legal sector grew in 2024, with median UK legal fee income per fee earner having increased for the 14th consecutive year in (10% growth in 2024, vs 8% in 2023) with fee income growth surpassing the wider UK professional services market. Whilst the sector expanded in size, it was not immune to headwinds impacting the wider economy. Inflationary pressures adversely impacted UK legal firm wage bills and squeezed profit margins. Additionally, law firms continue to face cash flow management pressures, with an industry wide median lock-up of 141 days in 2024.
UK legal firms also sought to leverage AI capabilities and investments in technology in an attempt to improve efficiency and profitability.
of UK legal firms now utilise AI for document drafting and automation
use it for contract review and analysis
use it for e-discovery
of UK solicitors report that AI has boosted work quality and productivity
say it has positively impacted mental wellbeing and work-life balance
Research has found that 36% of UK law firms now utilise AI for document drafting and automation, whilst 29% use it for contract review and analysis and 20% use it for e-discovery. Notably, 43% of UK law firms report that AI has boosted work quality and productivity, while over 20% say it has positively impacted mental wellbeing and work-life balance. The implementation of AI can be prohibitively expensive for smaller firms, which is cited as a key driver of consolidation at the lower end of the market.
Geographically, London remains a central hub for legal sector transactions. A number of law firms, including Irwin Mitchell LLP, have acquired regional firms in order to expand its service offerings outside of London.
In addition, law firms with a technology specialism generated significant interest during the year, a notable example being Arch Law’s acquisition of Conexus Law, a leading specialist in data centre law.
Transaction volumes
A total of 99 transactions involving UK law firms completed in 2024, a 25% increase on the 80 deals completed 2023.
Monthly deal volumes peaked in October 2024, with vendors anticipating changes to capital gains tax rates during the 2024 Autumn Budget. This trend mirrored the wider UK M&A market, whereby the number of transactions completed in the month of October 2024 was roughly double in comparison to the average for the prior 12-month period.
The appetite for M&A activity by listed UK law firms appeared to dampen somewhat during the year to 31 December 2024. The acquisition of Thursfields Legal by Knights Group was the only one completed by a UK listed law firm during the period, which represented a decrease in comparison to the four acquisitions completed by listed UK law firms in the year to 31 December 2023 and the five completed in the year prior. Knights Group continues to seek acquisition opportunities, having announced the acquisition of IBB Law LLP for £30 million in March 2025 and the acquisition of Birkett Long LLP for £16.6 million in May 2025. Whilst we understand that Gateley continues to seek acquisition opportunities, it has not completed on a transaction since July 2023.
Per our analysis, 11 of the transactions completed during the year to 31 December 2024 represented either direct private equity acquisitions or acquisitions by private equity owned/backed companies. This compared to 9 in the year prior, which appears to indicate an increasing private equity appetite in the UK legal sector.
A number of notable acquisitions completed during 2024. From a private equity perspective, in addition to the acquisitions by Adeptio Law Group, Lawfront Group and Fletchers Group noted previously, Waterland Private Equity announced the investment of an undisclosed sum into Manchester based Beyond Law Group. Right Legal Group also announced PE investment from Vespa Capital during the year. Additionally, insurance law specialist HF, which is 30% owned by CBPE Capital, acquired Law By Design in August 2024.
Otherwise, Front Row Legal Limited, a specialist in sports and media law, was acquired by White Label Resources Limited in April 2024. In the real estate and retail law subsector, Paul Taylor Solicitors was acquired by Browne Jacobson LLP in May 2024 for an undisclosed sum. Lastly, S J Edney Limited, which focuses on personal injury and clinical negligence, was acquired by RWK Goodman LLP in August 2024.
Listed company overview
Listed UK law firms continued to experience challenges in 2024, with share prices across all listed law firms other than Keystone having decreased since the start of the year.
RBG Holdings’ has faced multiple challenges across the 12 months to 31 December 2024. Revenue continued to decrease whilst debt continued to increase, which culminated in the group entering administration in late January 2025.
Keystone continues to outperform other law firms in areas such as client satisfaction, being recognised as a 2024 Best Law Firm by Best Lawyers for the third consecutive year. The point of difference of Keystone in comparison to the other listed UK law firms is the operating model, Keystone successfully utilises a consultancy model whereby lawyers are self-employed but operate under the Keystone brand.
Gateley experienced a relatively consistent share price decline from late 2021 until April 2024, understood to be primarily caused by challenges in maintaining consistent revenue and profitability growth over the period. The share price then levelled out from April 2024, which came against a backdrop of a 6% increase in revenue and a 15% decrease in EBITDA in the year to 30 April 2024.
Knights has continued to trade relatively well, generating increases in both revenue and EBITDA in the year to 30 April 2024. However, the share price decreased by 9% across the year to 31 December, understood to have been caused by the reporting of weaker than expected trading results later in the year.
2025 legal sector outlook
There are positive signs that M&A activity in the legal sector will continue to increase in 2025. City giant Herbert Smith Freehills is set to merge with New York based Kramer Levin – the combined group would have 640 partners.
There also appears to have been an uptick in interest from consolidators, both PE-backed and non-PE backed, in what remains a highly fragmented UK legal sector. Any further decreases in central bank interest rates across the year may also increase appetite for debt-backed acquisition activity in the sector across 2025.
However, any such decrease in central bank interest rates would likely adversely impact trading performance of UK law firms. Whilst interest earned on client funds historically represented 0.1% of total revenue for UK legal firms, this has increased to as much as 9%-10% for some firms in recent years. High interest rates are currently helping to alleviate margin pressures, however any further decrease in central bank rates could expose certain firms which are currently reliant on interest income from client funds.
Additionally, the SRA announced in late 2024 that it is considering whether to change rules to prevent law firms from retaining interest earned on client money. The SRA client account rules require firms to pay their clients a “fair” sum of any interest earned, however there is no definition of what “fair” means in practice. Whilst we understand that a consultation process is ongoing, any change to regulations which adversely impacts financial results could also impact M&A appetite of UK law firms.
The sector is also facing potential further regulatory upheaval, with a SRA consultation process currently underway as to whether it should have a more active role in approving M&A activity in the sector. This consultation is part of a broader consumer protection review aimed at enhancing oversight and managing risks associated with M&A. Whilst increased oversight from the SRA could adversely impact transaction timetables, any resultant increase in acquirer confidence could potentially help to drive deal appetite.
Conclusion
The UK legal sector continues to be a dynamic landscape for M&A activity, driven by several key factors. External investment, particularly from PE, is continuing to reshape the market, introducing new challenges and opportunities. Technological advancements have enhanced efficiency and service delivery whilst the war for talent and pricing pressures have compelled firms to innovate and diversify their offerings.
An attractive acquisition target in the UK legal sector typically possesses strong core practice areas, regional reach and scalable operations. Firms that demonstrate high-margin capabilities, client loyalty, and robust technological integration are particularly appealing. Moreover, firms that can navigate succession gaps and cultural integration post-acquisition are highly sought after.
Prospective buyers must be aware of several risks and issues, including regulatory constraints and the potential for cultural clashes. Thorough due diligence is essential to identify potential risks from both a financial and tax perspective. Prospective sellers should be prepared by organising all necessary documentation, including financial records, contracts, and legal history, to facilitate a smooth due diligence process.
By addressing these factors, both buyers and sellers can better position themselves for successful transactions in the evolving UK legal sector.
Get in touch
Niraj Patel
Jamie Lane
Partner and Head of Professional Practices Group
T: +44 (0)1202 204723 E: jamie.lane@saffery.com
Bournemouth
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