Consolidation Gathers Pace as Investors Broaden Their Sights
UK legal services has a long-standing reputation for resilience, but it is also becoming a more “investable” market with a widening pool of strategic consolidators and private capital targeting scalable platforms.
That backdrop makes our recent work for Rayden Solicitors particularly relevant, where Polestar CF advised the UK’s leading independent specialist family law practice, on its sale to private equity-backed Fletchers Group. The deal, announced in November 2025 and completed February 2026, was Fletchers’ first move into family law. While every deal has its own dynamics, it provides a useful lens on what is driving activity across the sector.
Why the Market is Attracting Capital
A key shift has been the move towards more flexible ownership structures. notes that the 2011 reforms introducing Alternative Business Structures (ABSs) “allowed non-lawyers to own and invest in law firms for the first time”, creating a workable route for institutional investors to back “platform” firms. The Legal Services Act reforms, implemented from 201, allowed non-lawyers to own and invest in law firms through Alternative Business Structures, creating a workable route for institutional investors to back platform firms.
Uptake has been meaningful. ABS structures now account for c.16% of SRA-regulated firms and capital has followed. Acquira estimates nearly £1.2bn of PE investment has gone into UK law firms over the last five years, including a record £534m in 2024.
The UK legal services market generates more than £40bn annually and remains highly fragmented, with many high-quality regional and specialist firms operating below national scale. That Fragmentation creates opportunity: when demand is resilient and revenue is repeatable, consolidation can unlock value through shared infrastructure, professionalised management and stronger investment capacity.
AI is Raising the Investment Bar
Whilst ABSs have facilitated the approach, it is AI and automation that is building much of the business case for investment. The legal space has historically moved cautiously in adopting new technology, but the accelerating capability of AI is impossible to ignore as it lifts productivity across the professional services market.
A Law Gazette survey cited only 26% of SME law firms were using generative AI in 2025, but the direction of travel is clear. Strategy& has also estimated that current AI tools could save around 11% of legal hours, highlighting the potential productivity impact still to come.
To remain competitive there is a recognition that AI investment and efficiencies will be required. However, for many firms, the opportunity is less about headcount reduction and more about better economics: faster turnaround, improved consistency, and freeing fee-earners to focus on higher-value advisory work. For investors and consolidators, this plays directly into the scale thesis – it is easier to fund and deploy technology across a platform.
Private Equity on the Rise
Private capital in law is no longer niche, particularly in consumer-facing specialisms where brand, marketing, process and operational efficiency matter. The sector is entering a new phase of consolidation, following more than 150 recorded deals in 2024 and continued momentum as buyers search for scalable regional and national platforms.
At Polestar, we are seeing particularly strong appetite for firms with £1m+ EBITDA. These businesses are large enough either to form a base platform for further consolidation or to represent a bolt-on acquisition that existing consolidators will not want to lose to competitors, driving higher multiples.
Illustrative examples of PE-backed platforms include:
A Recent Example: Fletchers Acquires Rayden Solicitors
Family law is a large and enduring market with strong referral dynamics, but it remains fragmented nationally. Raydens, founded in 2005, has grown into a multi-office specialist with more than 100 people and is exactly the profile that can benefit from additional capital and group infrastructure.
In that context, combining a specialist brand with a scaled group will support geographic reach, investment in systems and marketing, and selective M&A, while protecting client service and culture.
Polestar expects deal activity to remain strong as firms respond to rising technology expectations, succession planning pressures and a more sophisticated buyer universe. Firms that can demonstrate clear positioning, scalable infrastructure, robust financial reporting and a credible growth plan will be best placed to choose the right partner – and the ability to shape the next phase of their business on their own terms.
