Private equity in Australian law has been years in the making
The question is not whether an approach from private equity is attractive. It is what the firm wants capital to achieve, and what that asks of BD.
Private equity interest in Australian law firms did not arrive overnight. The groundwork has been laid for years: alternative business structures, listed firms, consolidation in the mid market and a generation of partners who have watched accounting and advisory firms take outside capital and grow.
The question for a partnership is not whether an approach is attractive. Most are, on paper. The question is what the firm wants capital to achieve. Succession and a payout for retiring partners is one answer. Funding a technology build is another. Buying scale in a practice area or a new city is a third. Each of those asks something different of the firm, and of its BD and client function.
If investors are providing capital to accelerate growth, BD and client teams become central to the growth thesis. The question asked of them changes from what did we win to where should we invest next. That is a different job, with a different kind of person in it: someone who can read a market, build a case for a practice or a sector and be held to a number.
It also changes what the function reports on. Pipeline, conversion, share of panel spend and client profitability move from nice to have to board papers. Firms that already run their BD function that way will find the conversation with investors easy. Firms that still treat BD as a support service will be asked to rebuild it, usually at speed.
The hiring implication is simple. The BD leaders who have run a function inside a business with external shareholders, or who have worked alongside private capital, are suddenly worth more to a law firm than they were a year ago. There are not many of them in Australia.
