‘You can invest in a single firm then make acquisitions while streamlining the back office, enhancing the margins and in five years, sell that to a new, larger private equity sponsor. That’s a very traditional approach. And it is no criticism of that approach, but we’re not private equity investors.’
Travis Lenkner (pictured) the chief development officer at Burford Capital, originally a traditional litigation funder, described the firm’s equity investments as ‘passive.’ Allowing lawyers to maintain control is a key part of its pitch.
Burford made its first equity investment in a law firm in 2020, taking a 32% stake in PCB Litigation, which merged with Byrne and Partners a year later, to form PCB Byrne.
‘We’ve been public that it’s an investment that has performed well,’ Lenkner added. The investment is a ‘minority stake,’ Lenkner said – a far cry from Inflexion’s £342m wholesale takeover of DWF in 2023.
Burford retains its original investment in PCB Byrne and receives its returns from being a partner in the alternative business structure (ABS) – the model that allows UK law firms to onboard external capital.
Private investment in law firms has moved up the agenda significantly in recent months, with the key question being when external investment will break in to big law proper. But many have raised concerns, in particular about how PE’s sharp elbows might dig in to law’s traditional culture.
For years, Burford has been pitching its quieter, less eye-catching form of equity investment – and it seems to be gaining traction.
‘Private equity has become a shorthand for all types of investment in law but this doesn’t fully capture the change that is happening,’ Lenkner told Legal Business. Burford believe there is a growing recognition that law, like accountancy, is a business that is trending towards becoming a more traditionally capitalised industry or profession.
‘Candidly, I don’t know why this realisation has taken so long,’ Lenkner said. ‘We view equity investments in law firms as the next step in the financialization of the legal profession.’
‘Five years ago, we weren’t having these conversations’
Though external investment in the legal sector in the UK has been possible since 2007, with the first ABC licences issued in 2011, uptake has been slow, and has tended to focus on regional firms that offer consumer facing services, or smaller firms that can be combined.
In Sweden last summer, PE house Axcel rolled six firms together, and has made clear its intention to expand internationally.
‘Magic circle, silver circle and top 25 firms are not talking about this type of consolidation, but they’re all trying to figure out where they sit in an industry that is being rearranged,’ Lenkner explained.
The last 18 months has seen firms ‘right at top of the pyramid’ reaching out to Burford to explore options. ‘These conversations are a new thing,’ Lenkner added. ‘Five years ago we weren’t having these conversations.’
Burford – which is listed on both the London and New York stock exchanges – aims to support the ambitions and strategic goals of existing leadership with capital that remains largely in the background. Burford invests capital from its balance sheet, meaning the firm is not required to wind up investment or exit at a set date.
Lenkner is open about the fact that many of the calls he fields from senior partners at major firms are exploratory, as firm leaders fulfil their ‘fiduciary obligation’ to understand the options on offer in the market.
Though many firms at the top are well capitalised businesses, the traditional partnership structure makes it difficult to enact the ‘enterprise thinking that is common for corporate,’ whether this relates to investment in new technology or geographic expansion.
‘Executive committees of firms are having “buy-versus-build” conversations about tech and similar things, but to the extent those have capital requirements attached to them, then you’re back to a conversation of how to finance it,’ Lenkner said. ‘I think if you’re forward thinking, or maybe just current thinking, equity is a part of that discussion.’
Towards the end of 2025, Cohen & Gresser announced that it was using the investment bank KBW Stifel to explore selling a stake in its business to investors, and McDermott Will & Schulte expressed its openness to explore taking private investment.
However, McDermott chairman Ira Coleman stressed that any such talks were exploratory and speculative.
Similarly, Lenkner doesn’t believe big law’s take up of external investment is going to happen overnight. ‘I don’t think these firms will necessarily transact tomorrow.’ he said, ‘but that doesn’t mean that one or two won’t.’
But firms are beginning to explore the idea, and Burford will remain patient. ‘I do think it is the future,’ Lenkner said. ‘We are at the point in the market development where the talk outpaces action, but that is healthy and good.’
