Key Takeaways
- • Santa Monica-based Wood Smith Henning & Berman (WSHB), a 600-attorney civil litigation and insurance defense firm, signed a private equity deal with Boston-based buyout firm Charlesbank, reportedly valuing the firm at $700 million according to the Financial Times.
- • The investment flows through a management services organization (MSO), WSHB Support Services, which absorbed roughly 550 non-legal staff, keeping legal decision-making with partners.
- • Charlesbank, which manages $24 billion in assets, has prior professional services investments including accounting firm Aprio (2024) and tech advisory platform Bridgepoint Technologies.
- • WSHB plans to expand from 600 to 1,200 lawyers over several years, using the capital for M&A, lateral hiring and AI-driven efficiency.
- • Legal practices are the latest target of private equity MSO structures, following healthcare and accounting, with Massumi + Consoli's Trive Capital deal in September as another example.
Summary
Wood Smith Henning & Berman has become one of the largest national law firms to secure private equity backing through a management services organization structure. The firm signed a deal with Charlesbank to invest in WSHB Support Services, a back-office entity. Because traditional ethics rules bar direct outside investment in professional services firms, MSOs have emerged as a workaround that allows private equity to supply capital without taking control of legal practice. According to the Financial Times, the agreement valued WSHB at $700 million.
Co-founder and executive chair Daniel Berman, who founded the firm in 1997 on what he described as a "shoestring budget," said the firm had grown to 35 states, 43 offices nationally and a London presence. He said the partners concluded that further scaling would require inorganic growth and greater use of artificial intelligence-driven efficiency. After weighing options including debt, the firm went to market in the first quarter of this year to find a private equity partner, ultimately selecting Charlesbank, which Berman said "ticked all the boxes."
Charlesbank, which manages $24 billion in assets according to its press release, said it has invested in professional services and insurance for years. David Katz, managing director and co-head of private equity at Charlesbank, said the firm's experience as an institutional capital partner to founder-led businesses would support WSHB's goal of better serving clients and people. Charlesbank's prior investments include accounting firm Aprio in 2024 and Bridgepoint Technologies, where it was the first private equity sponsor.
Private equity has backed professional services firms through MSOs or similar split models since the 1990s, beginning in healthcare before moving into accounting over the last decade. Legal practices are now the latest focus, including Century City-based Massumi + Consoli, which took an investment from Dallas-based Trive Capital in September. WSHB's new MSO absorbed the firm's 550-plus non-legal staff, including HR and IT professionals, and will add M&A and integration specialists to implement AI and other technology. Berman said the capital will help the firm meet growing client demand, with a stated goal of doubling its lawyer headcount from 600 to 1,200 over the next several years.
Co-founder and executive chair Daniel Berman, who founded the firm in 1997 on what he described as a "shoestring budget," said the firm had grown to 35 states, 43 offices nationally and a London presence. He said the partners concluded that further scaling would require inorganic growth and greater use of artificial intelligence-driven efficiency. After weighing options including debt, the firm went to market in the first quarter of this year to find a private equity partner, ultimately selecting Charlesbank, which Berman said "ticked all the boxes."
Charlesbank, which manages $24 billion in assets according to its press release, said it has invested in professional services and insurance for years. David Katz, managing director and co-head of private equity at Charlesbank, said the firm's experience as an institutional capital partner to founder-led businesses would support WSHB's goal of better serving clients and people. Charlesbank's prior investments include accounting firm Aprio in 2024 and Bridgepoint Technologies, where it was the first private equity sponsor.
Private equity has backed professional services firms through MSOs or similar split models since the 1990s, beginning in healthcare before moving into accounting over the last decade. Legal practices are now the latest focus, including Century City-based Massumi + Consoli, which took an investment from Dallas-based Trive Capital in September. WSHB's new MSO absorbed the firm's 550-plus non-legal staff, including HR and IT professionals, and will add M&A and integration specialists to implement AI and other technology. Berman said the capital will help the firm meet growing client demand, with a stated goal of doubling its lawyer headcount from 600 to 1,200 over the next several years.
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