Key Takeaways
- • Charlesbank Capital Partners has completed one of the largest private equity investments in a US law firm to date, backing Los Angeles-based Wood Smith Henning & Berman (WSHB), with the non-legal operations valued at around $700 million according to the Financial Times.
- • The investment is structured through a newly established management services organisation (MSO), WSHB Support Services, which handles non-legal infrastructure while WSHB lawyers retain control over legal advice and client matters.
- • WSHB, which defends insurers, corporations and institutional clients in litigation, has more than 550 lawyers across 23 states; proceeds will fund expansion into new markets, practice areas, and technology including AI and data science.
- • The deal reflects private equity's push beyond personal injury practices into the US legal market, where ethics rules have historically barred non-lawyer ownership of law firms.
Summary
Private equity firm Charlesbank Capital Partners has completed one of the largest investments in a US law firm to date, backing Los Angeles-based Wood Smith Henning & Berman (WSHB). According to the Financial Times, the deal values the non-legal operations at around $700 million. The transaction marks a significant development in private equity's push into the American legal market, where professional ethics rules have historically prevented non-lawyers from owning law firms.
Charlesbank is investing through a newly established management services organisation, WSHB Support Services. The entity will provide the firm's non-legal infrastructure and operational support, while WSHB's lawyers retain control over legal advice and client matters. The investment is intended to support WSHB's expansion into new markets, practice area capabilities, and technology investment, including AI and data science. WSHB specialises in defending insurers, corporations and institutional clients in litigation and has more than 550 lawyers across 23 states.
Daniel Berman, executive chairman and co-founder of WSHB, said the firm set out to build "a forward-thinking firm that endures well beyond its founders and offers a better model for the lawyers who practice here today and in the future." He added that the investment will help the firm better serve clients in a "complex and dynamic litigation environment."
The deal comes as private equity firms explore opportunities beyond personal injury practices, which attracted much of the industry's early investment. Earlier this year, Los Angeles corporate law firm Massumi + Consoli agreed a similar arrangement with Trive Capital, and Arizona-based personal injury firm Rafi Law Group announced a $125 million investment in its MSO. McDermott has held discussions about potential MSO arrangements, while Quinn Emanuel and Paul Weiss have reportedly held talks with private equity investors or advisers. The UK, by contrast, has permitted non-lawyer ownership of law firms since the introduction of alternative business structures, and British firms such as Centrefield and Northridge have recently taken outside capital.
Gipson Hoffman & Pancione and Troutman Pepper Locke advised WSHB on the transaction. Weil, Kirkland and Frankfurt Kurnit Klein + Selz advised Charlesbank, with Kirkland also advising on the debt financing.
Charlesbank is investing through a newly established management services organisation, WSHB Support Services. The entity will provide the firm's non-legal infrastructure and operational support, while WSHB's lawyers retain control over legal advice and client matters. The investment is intended to support WSHB's expansion into new markets, practice area capabilities, and technology investment, including AI and data science. WSHB specialises in defending insurers, corporations and institutional clients in litigation and has more than 550 lawyers across 23 states.
Daniel Berman, executive chairman and co-founder of WSHB, said the firm set out to build "a forward-thinking firm that endures well beyond its founders and offers a better model for the lawyers who practice here today and in the future." He added that the investment will help the firm better serve clients in a "complex and dynamic litigation environment."
The deal comes as private equity firms explore opportunities beyond personal injury practices, which attracted much of the industry's early investment. Earlier this year, Los Angeles corporate law firm Massumi + Consoli agreed a similar arrangement with Trive Capital, and Arizona-based personal injury firm Rafi Law Group announced a $125 million investment in its MSO. McDermott has held discussions about potential MSO arrangements, while Quinn Emanuel and Paul Weiss have reportedly held talks with private equity investors or advisers. The UK, by contrast, has permitted non-lawyer ownership of law firms since the introduction of alternative business structures, and British firms such as Centrefield and Northridge have recently taken outside capital.
Gipson Hoffman & Pancione and Troutman Pepper Locke advised WSHB on the transaction. Weil, Kirkland and Frankfurt Kurnit Klein + Selz advised Charlesbank, with Kirkland also advising on the debt financing.
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