Investor activity accelerates across legal consulting and agency markets
New market data indicates sustained M&A activity across legal, consulting, accounting and marketing services throughout 2025. Momentum is predicted to continue into 2026, as private equity increases its focus on scalable, high-margin professional services businesses.
The trend follows renewed attention on private capital in legal services after reports that McDermott Will & Emery is exploring a private-equity-enabled restructuring. While firm leadership has suggested any transaction remains some distance away, Luke Tobin, CEO of Succeed, a division of Unusual Group and Tobin Capital, said the situation reflects a broader structural shift in ownership and capital across professional services.
Tobin explains:
The more significant question is not whether one firm pursues private equity, it is why private capital is accelerating into professional services and what this means for governance, culture and long-term client outcomes.
Professional services firms are undergoing rapid digital transformation, with technology lifting productivity while simultaneously increasing the need for sustained capital investment. Law firms and advisory businesses are expanding spending on AI tools, automation, cybersecurity, client platforms and data infrastructure, intensifying demand for long-term funding. These forces have increased investor interest in executing buy-and-build M&A strategies, and consolidating fragmented regional and specialist markets.
Survey data indicates around 21 percent of UK law firms are actively considering private equity or external investment to support technology modernisation, lateral hiring, international expansion and acquisitions, according to HSBC’s 2025/26 law firm strategy and investment report. Further data from Grant Thornton reports that 70 percent of UK private equity firms plan to increase investment levels in 2026, with professional services identified as a priority sector.
Although overall UK M&A volumes softened slightly in early 2025 due to valuation discipline and macroeconomic uncertainty, private-equity-backed transactions in professional services have remained comparatively resilient, according to the EY UK M&A Market Monitor 2025. Industry forecasts suggest improving deal momentum in 2026, supported by easing inflation, improved access to leveraged finance and renewed sponsor confidence, based on the Bain and Company Global Private Equity Report 2025.
Predicted m&a and investment trends for professional services in 2026
- Increased private equity deployment into legal, consulting and agency firms
Capital allocation to professional services is expected to rise as investors seek predictable revenues, strong margins and lower capital intensity compared with industrial sectors.
- Acceleration of consolidation and platform roll-ups
Fragmented agency, consultancy and legal markets are likely to see more buy-and-build strategies, creating multi-brand groups with national and international scale.
- Greater focus on AI-enabled firms and digital transformation
Firms that demonstrate AI adoption, workflow automation, client data platforms and technology-led productivity gains are expected to command premium valuations.
- Rising cross-border acquisitions and international expansion
Private equity sponsors are likely to drive international expansion strategies, acquiring firms across Europe and North America to build global professional services platforms.
- Increased scrutiny on integration, culture and talent retention
As deal volumes rise, post-merger integration and people strategy will become critical value drivers, particularly in people-led businesses.
- More minority investments and structured capital deals
Founders and partners may increasingly opt for partial exits, growth capital and staged liquidity rather than full control sales.
- Higher valuation discipline and performance-linked earn-outs
Investors are expected to maintain tighter valuation frameworks, with greater use of earn-outs and performance-based deal structures.
- Growing role of founder-led advisory and governance models
Leadership teams will place greater emphasis on governance rights, decision-making control and long-term strategic autonomy when evaluating private equity partnerships.
Tobin predicts value creation in professional services will depend on more than financial structuring, highlighting the importance of culture, governance, leadership continuity and client trust.
These are people-led businesses where reputation, culture and leadership continuity matter as much, or more than capital, he said.
He added that leadership teams should evaluate investment decisions based on control, talent retention, client impact and long-term strategic alignment, not just headline valuation.
Private equity is becoming a structural force in professional services rather than a cyclical one, Firms that approach capital decisions with discipline, clarity and alignment will be better positioned to protect both enterprise value and firm identity.
