Charlesbank Capital Partners has invested in the non-legal operations of US law firm Wood Smith Henning & Berman (WSHB) in a transaction reportedly valuing the business at approximately $700m, according to Private Equity Wire. The valuation was previously reported by the Financial Times, while Private Equity Wire reported that Reuters described the transaction as valuing the business at about $700m.
Transaction scope and structure
WSHB has established WSHB Support Services, a management services organisation that will provide operational infrastructure and administrative support, according to Private Equity Wire. Private Equity Wire reported that the management services structure allows private equity firms to invest in law firms’ non-legal operations while complying with US regulations that generally prohibit non-lawyers from owning law practices or sharing legal fees.
WSHB will reportedly remain an independent law firm, retaining control of its legal practice and client relationships, according to Private Equity Wire.
Use of proceeds: expansion and technology
Charlesbank’s investment will support geographic expansion and technology development at WSHB, including artificial intelligence and data science capabilities, Private Equity Wire reported. Financial terms were not disclosed, according to Private Equity Wire.
WSHB is described by Private Equity Wire as a Los Angeles-based firm that employs more than 550 lawyers across 23 US states.
Client focus and sector backdrop
WSHB specialises in representing insurers, self-insured corporations and institutional clients, according to Private Equity Wire. The transaction follows increasing private equity interest in legal services, with investors targeting opportunities to consolidate operations and expand technology capabilities, Private Equity Wire reported.
Private Equity Wire reported that the transaction is among a growing number of private equity investments in legal services platforms as firms seek to capitalise on operational efficiencies and technology adoption across the sector.
(Widely known context: In the US, many states restrict non-lawyer ownership of law firms, which has led investors to use management services organisations to participate in law-firm-adjacent operations.)
