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This article is from the Australian Financial Review. Click here for the original article.
Quadrant Private Equity has agreed terms to acquire a stake in LegalVision, a technology-enabled disruptor law firm that claims to have taken significant market share from larger rivals since setting up shop in 2012.
The deal was announced to staff on Tuesday and is expected to see Quadrant investment director Peter Elkhouri, who spearheaded talks with LegalVision’s founders Lachlan McKnight and Evan Tait-Styles, take a board seat.
It also marks the maiden investment out of Quadrant Growth Fund No. 3, for which the firm’s dealmakers raised $660 million in 2024.
“The business now has more than 4500 active clients and is growing 30 per cent plus per annum, with its disruptive technology-driven model,” Elkhouri told this column in an exclusive interview. “We are excited to be partnering with Lachlan and the team.”
Quadrant’s backing would accelerate the business’ growth trajectory, McKnight added, “at a time when there is growing opportunity to take advantage of innovations in legal tech and artificial intelligence”.
While the deal value was not disclosed, Quadrant’s third growth fund seeks to invest $50 million to $100 million into new portfolio companies. The buyout firm was advised by PwC, OC&C, and Corrs Chambers Westgarth, while Allier Capital and Gilbert + Tobin tended to the sell-side.
Law and Orders
LegalVision is among a crop of new law firms, colloquially dubbed NewLaw and born out of clients’ demand for cheaper and more efficient legal advice, that enjoyed explosive growth during the pandemic. Most use a fixed-fee subscription pricing model, rather than law firms’ legacy business model of charging clients by billable hours. NewLaw firms also tend to prefer offering advice online.
In a late 2021 interview with The Australian Financial Review, McKnight, a former Norton Rose lawyer, said the business had been growing revenue at about 30 per cent for a couple of years and was looking to expand overseas after “saturating” the Australian market. It chose to open an office in Manchester, deciding it made little sense to pay London’s exorbitant rents when half of its lawyers were expected to work from home.
LegalVision’s clients range from start-ups and franchisees to aged care, retail and utilities businesses, and seek advice on matters such as M&A, contracts, immigration and work safety.
Law firms’ partnership structures make them tricky candidates for initial public offerings – giant HWL Ebsworth’s failed attempt in 2020 is the perfect example. The big issue is how to split profits between external shareholders and the firm’s revenue generators (its partners).
Slater and Gordon was the first law firm in the world to list on a stock exchange in 2007, and multiple financial woes, all self-inflicted, forced it into the hands of the hard-eyed financial wheeler and dealers from Allegro almost two years ago.
More recently, Adamantem Capital Management won a takeover battle for Qantm, an intellectual property law firm listed on the ASX, seeing off a rival offer from UK firm Rouse International Holdings. Wotton + Kearney, a law firm specialising in insurance matters, was acquired by Straight Bat Ventures in 2022 when it had 57 partners and 300 lawyers.
Quadrant was advised by PwC, OC&C, and Corrs Chambers Westgarth. LegalVision was advised by Allier Capital and Gilbert + Tobin.