Private equity found you

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Now back to business.

Private equity has found plaintiff law. It is moving quietly, one firm at a time, and the quiet is deliberate. If this is the first you are hearing of it, that is the point.

Mike Saile has watched it up close. He runs a Philadelphia-area PI firm that has tripled in two years and sits in the rooms where these deals get done. His read: the money is about to force a choice on every plaintiff firm in the country, yours included, and most owners will make it by accident instead of on purpose.

The money is already in the room.

The consolidation is not a forecast. It already happened. In January, Dudley DeBosier sold its non-lawyer operations to private equity. In March, Rafi Law Group closed that $125 million deal. This spring there was a private equity day in Baltimore, a room full of lawyers, bankers, and venture capitalists all running the numbers on plaintiff firms.

They are not using the Arizona and Utah business structures. Too much compliance. They come in through MSOs, the same management services structure that rolled up dental and medical practices. The MSO owns everything but the lawyers: staffing, marketing, payroll, case management, tech. Firm ownership never technically changes, which is what keeps it ethical, and the investors take a share of economics that used to stay in the building.

Dentists saw this movie years ago. So did roofing and HVAC. Saile's read is blunt: law is next, and it is not waiting for your permission.

The math is going to make you choose.

Here is why this reaches the two-attorney shop and not just the giants. A signed auto case runs $2,000 to $3,000 to acquire in most markets, and $4,000 to $6,000 in California. Now picture five Morgan and Morgan-scale operations in your city, all buying the same cases. Those numbers climb, margins compress, and the firms that never built real operations under the founder feel it first.

Saile sees three doors:

1. Grow and compete. Build enough scale and operations to hold your ground.
2. Grow and position to sell. Private equity is shopping for firms in the $15 to $25 million revenue range with clean books and a management layer that does not collapse when the named partner takes two weeks off.
3. Do nothing. Get absorbed quietly, shrink, or stop taking cases when you finally step back.

Most firms pick the third door without noticing they picked anything. That is the one Saile is warning you off.

Compete or sell, the work is the same.

A firm built to sell and a firm built to compete are the same firm, because the operations that make you acquirable are the operations that let you outlast the consolidators. If you are too fragile to sell, you are already losing.

Saile spent three years building that firm: a real management layer, documented process, and intake treated as the priority it is. Because every missed lead is money gone and no ad budget outruns broken intake. Case management he can actually query, and AI built for plaintiff work wired through the whole life of the case instead of bolted on at the end. None of it is optional anymore. It is the price of staying independent, the one outcome nobody at the conferences is selling.

Saile lays out the full MSO mechanics, the deal structures down to the buyout percentages, and where he is taking his own firm. Read Mike Saile's full piece here.

One more thing

Since we are on the subject of ad money, a reminder of where the arms race can lead.

A Savannah PI lawyer named Jamie Casino bought two full minutes of local Super Bowl airtime in 2014. He used them to explain, over pounding heavy metal, how the murder of his brother turned him from a criminal defense lawyer into a plaintiff's attorney.

Somewhere in the middle he lays flowers on a grave, picks up a flaming sledgehammer, and smashes a tombstone.

The Wall Street Journal compared it to a straight-to-video Steven Seagal movie. Deadspin called it the most metal injury commercial ever made. Both were being generous.

The lesson isn't the sledgehammer. It's that he had a real answer to "what would get me remembered in Savannah," and he didn't flinch from it. Twelve years later you're reading about it in a newsletter.

So: which door are you walking through? Grow and compete, grow and sell, or something you think Saile got wrong. Hit reply and let me know.

Whatever you end up building, build it on purpose. Pyrotechnics optional.

~ Adam

Quote of the week:

“Not all private equity money is equal. There are a bunch of guys in half-zips hustling to borrow some money and throw it at your company. Winning with the best product beats winning with the best margin.”

- Seth Price, founder of Price Benowitz and BluShark Digital, who sold his agency to private equity this year, on how to tell good money from bad.