Key Takeaways
- • Law firms are rapidly building out "capital solutions" practices, with Mayer Brown and DLA Piper launching London-based teams in 2026 following Akin's 2024 entry into the market, mirroring similar moves by JPMorgan and Goldman Sachs in 2025.
- • Capital solutions work—encompassing minority stake sales, PIK notes, preferred equity, and hybrid capital structures—addresses private equity's challenge in exiting portfolio companies in a difficult market and represents a significant departure from traditional buyout or conventional financing structures.
- • The sector is highly specialized and complex, requiring multidisciplinary deal teams of three specialists: a private equity partner handling equity mechanics, a financing partner for debt considerations, and a restructuring partner to assess downside risk.
- • Capital solutions sits in the spectrum between private credit and private equity, attracting "a wide spectrum of investor" according to Andrew Lynch, co-head of capital solutions at Linklaters, and has evolved from a niche practice a decade ago into a "fast-growing, highly profitable slice of work" for major law firms.
Summary
Major law firms are racing to establish capital solutions practices as the sector emerges as a lucrative growth area in institutional legal services. Mayer Brown and DLA Piper both launched dedicated capital solutions practices in London during 2026, following Akin's entry into the market in 2024. This trajectory mirrors similar expansions by leading investment banks—JPMorgan and Goldman Sachs both launched capital solutions desks in 2025—indicating broad institutional recognition of the practice area's strategic importance.
Capital solutions work addresses a structural challenge in private equity markets: the difficulty of exiting investments profitably in a constrained exit environment. Rather than pursuing conventional straight buyouts or standard debt financing, sponsors increasingly deploy alternative capital structures to extract value and manage portfolio positioning. According to Andrew Lynch, co-head of capital solutions at Linklaters, the practice encompasses "everything to the right of private credit and to the left of private equity," a characterization that underscores its positioning as a distinct asset class between traditional credit and equity strategies.
The specific instruments covered under capital solutions include minority stake sales, payment-in-kind (PIK) notes, preferred equity tranches, and other hybrid capital structures. These transactions are structurally complex, typically requiring multidisciplinary legal teams of three specialists: a private equity partner to handle equity mechanics and governance issues, a financing partner to manage debt-side considerations and documentation, and a restructuring partner to assess potential downside scenarios and loss scenarios. This staffing intensity reflects the deal complexity and the cross-functional expertise required to navigate legal, commercial, and structural risks.
The growth trajectory of capital solutions represents a significant evolution from a decidedly niche practice area a decade ago into what law firms now characterize as a "fast-growing, highly profitable slice of work." This expansion reflects broader market dynamics in which traditional exit pathways have compressed, forcing sponsors to innovate structurally and creating sustained demand for specialized legal advisory services. The involvement of major investment banks alongside leading law firms suggests institutional investors view capital solutions as a core competency rather than a peripheral offering.
Capital solutions work addresses a structural challenge in private equity markets: the difficulty of exiting investments profitably in a constrained exit environment. Rather than pursuing conventional straight buyouts or standard debt financing, sponsors increasingly deploy alternative capital structures to extract value and manage portfolio positioning. According to Andrew Lynch, co-head of capital solutions at Linklaters, the practice encompasses "everything to the right of private credit and to the left of private equity," a characterization that underscores its positioning as a distinct asset class between traditional credit and equity strategies.
The specific instruments covered under capital solutions include minority stake sales, payment-in-kind (PIK) notes, preferred equity tranches, and other hybrid capital structures. These transactions are structurally complex, typically requiring multidisciplinary legal teams of three specialists: a private equity partner to handle equity mechanics and governance issues, a financing partner to manage debt-side considerations and documentation, and a restructuring partner to assess potential downside scenarios and loss scenarios. This staffing intensity reflects the deal complexity and the cross-functional expertise required to navigate legal, commercial, and structural risks.
The growth trajectory of capital solutions represents a significant evolution from a decidedly niche practice area a decade ago into what law firms now characterize as a "fast-growing, highly profitable slice of work." This expansion reflects broader market dynamics in which traditional exit pathways have compressed, forcing sponsors to innovate structurally and creating sustained demand for specialized legal advisory services. The involvement of major investment banks alongside leading law firms suggests institutional investors view capital solutions as a core competency rather than a peripheral offering.
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