Press Coverage
Edward Braum Quoted in PitchBook: "The PE Playbook that Reformed Accounting Is Coming for Law Firms"
Ice Miller deputy managing partner Edward Braum was quoted in the PitchBook article, "The PE playbook that reformed accounting is coming for law firms."
The article included:
“Law firms, by their nature, are more conservative,” said Ed Braum, deputy managing partner at Ice Miller, a US law firm whose PE practice has structured MSO deals across healthcare, dental and veterinary over 25 years. “It’s one thing to buy a dental office where there’s typically one dentist and five or six other folks. In a law firm, you might have 150 partners you have to get to agree to do something. It’s just difficult to get that many people to restructure.”
That conservatism is breaking down. In the US, law firm deals are increasingly being run through investment banks, with major firms now actively seeking outside financing. Braum, who is advising clients on active transactions, said the market has matured to the point where law firms are being auctioned “like any other company in any other industry”. The question investors are now asking is not whether to enter the legal market, but how quickly and what technology will do to the asset they are buying.
AI also poses a direct threat to the revenue model PE is buying into. Work that once required hundreds of hours of associate time can now be completed in minutes, Braum noted, collapsing the billable hour economics that underpin most law firm revenue. There is also the issue of how it impacts pricing: firms that have built their business around hourly billing face an ethical constraint against inflating timesheets to compensate.
For commercial and mid-market firms, PE offers a structural answer. By locking partners into five-year vesting schedules tied to their equity in the management services organization, investors create a financial incentive to stay that the traditional partnership model cannot replicate. “If you get this structure in the next year and build up good partners, fantastic,” Braum said. “But somebody that does this three years from now wouldn’t be able to pull those lawyers out of firms that have already done it.”
