Your law firm will likely never have an exit.

No windfall to fund retirement. No eight-figure wire to validate thirty years of exertion. No legacy transaction that proves the firm outlived its founder.

Instead, you'll approach retirement like most founders before you. Shift staff to part-time, signaling they should start looking. Write glowing recommendations while they update resumes. Wind down cases. Let the lease expire.

Your name comes off the door. Clients find new counsel. Three decades of 6 a.m. alarms and weekend briefs dissolve into nothing. The business you built never was a business—just an elaborate container for your labor.

This is the trajectory for most law firm owners: work until you can't, save what you can, then watch the machine that generated those savings get parted out for scrap.

Meanwhile, the dentist down the street just sold to private equity for 12x EBITDA. The accountant merged into a roll-up and cashed seven figures.

What makes you different? Not talent. Not work ethic. Not client service.

Regulation—and how you built your firm because of it.

But the walls are down. Arizona opened the gates. Utah made it permanent. Washington's piloting. KPMG—yes, the accounting firm—now holds a law license and practices in Phoenix.

Private equity is here, like it or not. They’re circling. Writing the same checks that consolidated healthcare, rolled up dentistry, transformed accounting. 

The revolution has happened. It’s past time you took notice.

Except there's a problem. When PE looks under the hood of most law firms, they find nothing to acquire. No systems. No transferable brand. No enterprise value. Just smart people trading time for money in shared office space.

The regulatory revolution has created a historic arbitrage opportunity, the chance to sell what was never sellable. But it's revealing an uncomfortable truth: most law firms aren't businesses at all. They’re income engines that only function so long as their founders remain in place.

The coming years will separate firms into two categories: those with something to sell, and those still pretending they're different from every other name on the door.

Which are you?

For fifty years, American law firms operated under a simple prohibition: lawyers own law firms. Period. No external capital. No corporate shareholders. No management consultants with equity stakes. The profession policed itself through Rule 5.4—a regulatory moat that kept the barbarians out.

That moat is gone.

Not eroding. Not threatened. Gone. And most firm owners haven't noticed that the bridge is already built.

Arizona moved first and most aggressively. By early 2025, they'd approved 117 Alternative Business Structures—entities where non-lawyers don't just invest but control. KPMG, the accounting giant, now practices law in Phoenix. Not through some workaround or partnership. They hold a license. They employ lawyers. They deliver legal services like they deliver audits—systematically, scalably, profitably.

Other states followed with their own experiments. Utah created a sandbox. The idea: let’s try this carefully, measure everything, see what breaks. Five years later, the answer was: nothing broke. Access improved. Consumers benefited.

Each state that moves makes the next move easier. Washington launched its pilot in 2024. D.C. has quietly allowed limited non-lawyer ownership for decades—evidence that the sky doesn't fall when outsiders buy in.

The ABA maintains official resistance, but their influence wanes with each defection. Resolution 402 in 2022 admitted fee-sharing might not trigger Armageddon. Rule 5.4 is increasingly described as ‘outdated’—bureaucratic shorthand for dead but not yet buried. State bars are now exploring local reforms, choosing innovation over orthodoxy.

But here's what makes this moment different from past reform attempts: we have evidence it works.

The UK eliminated ownership restrictions fourteen years ago. Law firms started trading on the London Stock Exchange. But Australia led the way—Slater and Gordon went public in 2007, creating the world's first listed law firm. These aren't cautionary tales. On the contrary. More innovation. More competition. The profession survived. It arguably thrived.

The American legal market—$400 billion, fragmented, inefficient—looks exactly like healthcare did fifteen years ago. Like dentistry ten years ago. Like accounting five years ago.

Private equity knows this pattern. They've seen this movie. They know how it ends.

Private equity doesn't need to figure out how to enter legal. They've already conquered three identical fortresses. Same walls. Same defenders. Same protestations about professional independence and ethical obligations. Same capitulation.

The playbook has been run before.

Start with the workaround. Every protected profession thinks it's safe behind regulatory walls. PE doesn't storm the walls—they tunnel under them. In dentistry, they created Dental Support Organizations. Technically, the dentist owns the practice. Practically, PE owns everything else: real estate, equipment, marketing, scheduling, billing, hiring, firing. The dentist keeps their license and a thin veneer of clinical autonomy. PE keeps the economics.

By 2023, over 150 PE-backed DSOs controlled thousands of practices. Your neighborhood dentist who "just joined a group for administrative support"? They sold to private equity. They just don't phrase it that way.

Healthcare scaled the model up. Management Services Organizations—MSOs—same structure, bigger targets. The doctor owns the medical practice. PE owns the MSO that runs everything else. Investment exploded from $19.5 billion in 2015 to $74.4 billion in 2022. Orthopedics, dermatology, ophthalmology: anywhere with predictable procedures and insurance codes became a target.

The results were predictable. Rapid consolidation—fragmented local practices became regional powerhouses. Operational efficiency—standardized systems replaced artisanal approaches. Geographic expansion—capital fueled growth that decades of retained earnings never could. Technology adoption—PE forced modernization that practitioners resisted for years.

Also predictable: the downsides. Quality concerns as efficiency trumped everything. Regulatory scrutiny as states realized they'd lost control. Professional pushback as practitioners became employees. Higher consumer costs as consolidated markets eliminated competition.

But here's what critics miss: PE doesn't care about professional hand-wringing. They care about returns. And the returns have been exceptional. 4-8x multiples became standard. 10x, even 15x, for premium roll-ups.

Law firms watching from the sidelines, insisting they're different, sound exactly like dentists in 2010. "We're not healthcare providers, we're doctors." "Our profession is built on trust." "Patients won't accept corporate dentistry."

Today, 13% of dentists work for DSOs. In ten years, it'll be 30% or more.

The only question for law: how fast will it happen once it starts?

A buyer walks into your firm tomorrow with a blank check. "Name your price," they say. You run the numbers: revenue times a multiple, work in progress, accounts receivable, maybe the furniture. You arrive at a figure that seems fair for thirty years of building.

The buyer laughs and walks out.

Because you've just revealed you don't understand what's for sale. You're pricing income. They're buying enterprise value. And most law firms have precisely zero.

Enterprise value is what remains when you leave. Not your billings. Not your relationships. Not your reputation. What remains. The machine that runs without you. The brand that attracts without you. The systems that deliver without you.

Test it: take a three-month sabbatical. Don't check email. Don't call in. Don't coach from the beach. What happens? If your firm thrives, you have enterprise value. If it survives or struggles, you have a job with employees.

Most firms can't last three weeks without their founder, let alone three months.

The evidence is everywhere. Most firms depend entirely on one or two key people. Not just for rainmaking—for everything. Quality control. Client management. Strategic decisions. Staff morale. The founder isn't running the business. The founder is the business. And people, unlike businesses, can't be sold.

Your brand is a surname, not a position. Johnson & Associates tells the market nothing except that someone named Johnson once passed the bar. It promises nothing specific. It owns no mental territory. It could be criminal defense or corporate compliance. When Johnson retires, the brand retires with him. Because it was never a brand—just a guy's name on a sign.

Your revenue is relationships, not systems. Those referrals from estate planners you've known for twenty years? They're sending you work, not your firm. The therapists who call for divorce cases? They have your cell phone, not your intake system. This isn't transferable value. It's a personal network that happens to generate legal work.

This isn't about size or sophistication. A three-lawyer firm with true systems beats a thirty-lawyer firm of well-compensated employees. Enterprise value doesn't care about headcount. It cares about sustainability without founders.

Most firms will protest. They'll point to longevity—"We've been here forty years!" They'll cite reputation—"Everyone knows us!" They'll list clients—"Fortune 500 companies!"

All true. All worthless to a buyer. Because what they're buying isn't history. It's future cash flows. And future cash flows that depend on your continued presence aren't worth anything.

Some firms get it. While others complain that PE is coming, they’re quietly building what PE wants to buy.

One family law firm wrote 700+ blog articles—now the most comprehensive legal resource in their state. They dominate organic search. Leads flow whether the founder shows up or not. The content library is the asset. The steady traffic forms the foundation for predictable future cash flow—founder or no founder.

That’s the difference. They’re building something that can run without them—even if it’s not there yet.

Most won’t. They’ll keep grinding for income while leaving the asset on the table.

But that’s what determines your multiple.
Build real systems, get real exits.
Sell an enterprise, or stay trapped in a job that dies with you.

Which path are you choosing?

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Nima Ostowari
Founder, JusticeArch