Professional services businesses continue to attract significant interest from private equity investors, consolidators and strategic buyers. We explore five trends shaping the next chapter of professional services M&A.
Published: 22 October 2026
Authors: James Foster
The sector offers many of the characteristics investors value, including strong client relationships, specialist expertise and the potential for recurring revenues. However, the rationale behind transactions is evolving. Drawing on the trends we are seeing through our recent deal activity, five themes are becoming increasingly prominent.
1. Scale remains important, but specialism is increasingly driving value
Investors and acquisitive businesses are showing particular interest in firms with specialist capabilities, defensible market positions and expertise that can be difficult to replicate. This can include tax and intellectual property advisory businesses, specialist consultancies and firms focused on highly technical or regulated areas.
Technology is also increasingly influencing the investment case, particularly in accountancy. The potential for AI and automation to reshape labour-intensive processes, increase capacity and change the economics of service delivery is attracting attention from investors considering where future value may lie. In turn, this is raising questions around workforce models and valuations, while bringing professional services businesses to the attention of US investors and funds that have historically focused on technology and software opportunities.
For buyers, acquiring specialist expertise can provide access to new clients, create additional revenue streams and differentiate an existing platform. It can also offer a more effective route into an attractive market than attempting to develop the same capabilities organically.
2. Buy-and-build strategies are becoming more sophisticated
The first generation of buy-and-build strategies in professional services ofteny focused on aggregating revenue, expanding geographically and creating scale in fragmented markets.
Those objectives remain relevant, but the more developed strategies we are now seeing are increasingly focused on capability as well as size.
Platforms therefore need to think carefully about the strategic fit of each acquisition, rather than simply pursuing volume. This places greater emphasis on the integration plan. Buyers need to understand not only whether the target is financially attractive, but also how its people, systems, client base and culture will fit into the wider group.
3. Private equity is looking at the full value-creation story
Private equity investment in professional services continues to broaden, but different professions have travelled at different speeds. Accountancy has already seen significant sponsor-backed consolidation, while the legal sector has historically presented greater structural and regulatory barriers to outside investment.
That distinction is becoming increasingly relevant for investors. In the UK, alternative ownership structures have opened legal services to external capital, while in the US restrictions on non-lawyer ownership have made conventional investment considerably more difficult. Nevertheless, private capital is increasingly exploring structures that provide exposure to legal businesses and their associated operations. Recent US commentary notes increased PE activity through management services organisation structures, while almost all US jurisdictions continue to prohibit direct non-lawyer ownership of law firms.
This raises an important question for investors: whether some of the characteristics that have made accountancy attractive to consolidators, including fragmented markets, strong client relationships, specialist expertise and opportunities for technology-led efficiency, can increasingly support investment in other professional services sectors.
4. People remain the critical asset
In professional services businesses, much of the value resides in people, their specialist knowledge and the client relationships they have developed.
This makes people considerations fundamental to any transaction. Buyers and investors need to understand how key individuals will be retained, how leadership succession will be managed and whether the proposed structure provides the right incentives for future growth.
Where a business has traditionally operated as a partnership or is heavily dependent on a small number of senior individuals, these points may require particularly careful consideration.
Incentive arrangements and equity participation can be used to align management teams with the business’s longer-term objectives. However, financial arrangements are only part of the picture. Career progression, decision-making, leadership responsibilities and culture can all affect whether people remain engaged following a transaction.
5. Deal structures are evolving
The valuation of professional services businesses can be complicated by their reliance on people, client relationships and future performance. As a result, we are seeing greater use of structures intended to share risk and align the interests of buyers, sellers and management teams.
Earn-outs and deferred consideration can help bridge differing expectations around valuation, particularly where future growth forms an important part of the investment case. Rollover equity can allow vendors and management teams to retain an interest in the combined business and participate in its future development.
Recent professional services transactions in Shoosmiths’ proprietary deal data have included combinations of cash consideration, earn-outs, loan notes and rollover arrangements.
These mechanisms can support a transaction, but they also add complexity. Earn-out provisions need to define clearly how performance will be measured and how the business will be operated during the relevant period. Rollover arrangements require careful consideration of governance, minority protections and the circumstances in which management can realise its investment.
Looking ahead
Professional services M&A is likely to remain an attractive area for private equity investors and strategic buyers, but the characteristics of the strongest opportunities are becoming clearer.
Specialist expertise, scalable capabilities, high-quality management and a credible approach to technology and integration are all increasing in importance.
At the same time, AI has the potential to reshape how professional services businesses operate and grow. This creates opportunities around efficiency and scalability, but also new questions around workforce models, differentiation and how businesses should ultimately be valued.
For investors, consolidators and management teams, the key question is no longer simply whether a business can grow. It is whether the transaction provides the right foundations for sustainable value creation while protecting the expertise, relationships and culture on which the business depends.