- Article
- Growing a business
- Enable Growth
- Obtaining Funding
Funding Legal Frontrunners
The UK legal sector is facing increased competition, consolidation and change. Explore three powerful growth levers – Talent, Private Equity and M&A, and Technology – and discover how a range of finance levers are enabling UK law firms to compete globally.
Why Financial Strategy Matters
Behind every major move, whether hiring, M&A or tech investment, lies a financial choice. Here we explore how different financial levers are supporting the nation’s legal frontrunners.
Objective | Finance Strategy | Outcome |
|---|---|---|
Win talent | Capital & working capital lines | Attract, retain, maintain liquidity |
Growth through M&A and PE | Acquisition loans & equity | Execute deals without cash strain |
Innovate | Leasing & asset finance | Stay at the forefront without upfront cash |
1. Winning the Talent Race
Partner Capital Loans and cashflow support are now strategic, not just tactical.
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Top legal talent is in high demand, with firms facing rising salary expectations and evolving workforce preferences. Many are responding with financial agility, using capital loans to support equity entry and credit lines to manage payroll costs. The ability to fund talent strategically is becoming a competitive differentiator.
Capital contributions are increasingly being supported through structured partner funding, enabling firms to grow their equity base and bring in senior lateral hires more flexibly. Average total partner capital accounts are broadly consistent with the prior year, though the UK’s Top 10 firms have increased balances by 6.2% (PWC Annual Law Firm Survey).
Working capital solutions are helping firms manage the cost of salary uplifts and hiring initiatives, especially where revenue lags behind headcount expansion.
Financial tools are also being used to navigate tax timing and payroll peaks, providing stability during periods of rapid team growth.
2. Growth through M&A and private equity
Law firm consolidation is accelerating, driven by a need for scale, specialisation, and geographic reach.
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There were 99 UK law firm deals in 2024, an increase of 25% on the previous year. Whether deals are partner-led or private equity-backed, access to structured finance is often the difference between opportunity and execution. With the right capital in place, firms are reshaping their markets.
Acquisition activity is being enabled by dedicated lending facilities that support firms in funding merger transactions, integration costs, and strategic expansion.
Private equity-backed platforms are combining external investment with structured debt to support buy-and-build strategies in a fragmented market.
Partner buy-outs and succession planning are increasingly financed through hybrid structures that allow for long-term transition while preserving operational continuity.
3. Backing Tech Innovation
96% of law firms now use AI. But the cost of change still needs funding. Our research shows leaders expect to spend an average 6% of annual revenue on IT this year.
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Legal services are being transformed by AI and other forms of automation. But the pace of adoption is shaped not only by ambition and human behaviour, but also by access to funding. From leasing to asset finance, smart financial solutions are helping firms spread the cost of innovation.
Legal tech investment is gaining momentum, with leasing and asset finance making large-scale system upgrades more financially sustainable.
Subscription-based financing is allowing firms to adopt AI and case management tools without major upfront expenditure, smoothing the path to digital transformation.
As client demands grow and cyber threats evolve, firms are using longer-term finance to future-proof infrastructure while maintaining control over short-term cash flow.
