The professional services sector is undergoing a significant transformation, with private equity investors and strategic buyers increasingly targeting these businesses.

Published: 23 January 2026
Author: Javid Laher

The market has been attracted by their stable revenue models, strong client relationships, and opportunities to automate and streamline operations through technology. Understanding the unique legal and regulatory considerations in these transactions is essential for further M&A activity in this sector in 2026.

Why professional services are attracting investment

The pace of activity has accelerated sharply. Over the past year, multiple mid-market firms in both law and accountancy have secured external investment, reflecting a clear trend towards consolidation. This is not limited to one-off deals – investors are pursuing buy-and-build strategies to create national platforms and diversify service offerings.

Several factors explain this surge:

• regulatory shifts: The SRA’s rules permitting non-lawyer ownership and the Financial Reporting Council’s audit separation requirements have opened new opportunities for external capital.
• fragmented market: Consolidation opportunities amongst small and mid-sized firms make activity within the sector an efficient route to scale due to recurring revenue streams and predictable cash flows, efficiency and expanded geographic coverage.
• capital requirements: Firms need funding for technology upgrades, automation, and international expansion.
• succession planning: Smaller firms in particular face leadership transitions and external investment can be a solution to secure an exit for a partner as well as continuity and growth for the firm.
• tax pressures: Recent changes to partnership tax rules mean that profits are taxed on a tax year basis rather than the accounting year-end. This had a particular cash flow impact for many firms, which encouraged them to seek security as part of a larger group.
• specialist niches: More niche businesses, such as IP-heavy law firms or specialist consulting practices, are attracting heightened investor interest. Their higher barriers to entry and deep expertise create competitive advantages, making them particularly appealing for PE-backed consolidators.

The numbers underline the trend, nearly half of all professional services transactions last year involved PE-backed buyers. Surveys suggest that two-thirds of PE leaders plan to increase investment in this sector, with many targeting growth of 20–25%.

Recent market examples

Large platform deals making headlines:

• Cinven’s investment in Grant Thornton UK – This transaction, completed in late 2024, is believed to value the firm at up to £1.5 billion, making it the largest private equity investment in the UK accountancy sector to date.
• HG Capital’s investment in Cooper Parry – HG Capital acquired a significant stake in Cooper Parry, one of the UK’s fastest-growing accountancy firms, to accelerate its buy-and-build strategy and expand its advisory services. The deal underscores strong investor appetite for scalable professional services platforms.
• Inflexion’s investment in DWF – Inflexion Private Equity took DWF private in a deal in a transaction which illustrated the willingness of PE to invest in “big law” (as well as smaller more volume based practices), a trend that is likely to continue.

Shoosmiths’ role in driving consolidation:

• S&W Group’s strategic acquisitions – we continue to support S&W, a leading accounting and advisory business, and recently advised on two strategic UK acquisitions as part of its growth strategy with Apax Funds. The purchases of ClearViewIP, a London-based intellectual property advisory firm, and Peppercorn Tax, a specialist tax advisory practice in Newcastle help broaden S&W’s service offering and strengthen its regional presence in the North of England.
• Azets acquisition of Ensors Accountants LLP – Shoosmiths has advised PE backed accountancy consolidator Azets on numerous acquisitions. Now one of the UK’s fastest-growing accountancy groups, we acted on its multi-million pound acquisition of Ensors Accountants LLP, a leading regional accounting, tax, and advisory firm.

Shoosmiths has also acted on numerous other acquisitions involving professional services firms and law firms, advising consolidators and investors on structuring, regulatory approvals, and strategies to mitigate legal risk throughout the transaction process.

Key legal issues

Professional services transactions differ from typical corporate acquisitions, in part because these businesses are usually structured as LLPs or partnerships rather than companies, and their value is heavily tied to people and client relationships rather than tangible assets. Parties should consider:

1. Structuring the deal

• LLPs and partnerships dominate this sector, requiring bespoke structuring.
• Common approaches include buyouts via a newco stack, minority investments, or carve-outs of non-core divisions, requiring additional complexity.
• ABS structures under the Legal Services Act allow non-lawyer ownership but require regulatory approval.

2. Regulatory approvals

• law firm acquisitions need SRA consent; accountancy deals require ICAEW approval.
• these approvals can impact timelines and should be built into conditions precedent and long-stop dates.

3. Partner & talent Retention

• professional services firms are fundamentally people-led businesses – their reputation and client relationships are built on their people. Restrictive covenants and earn-outs should protect against team departures and create ongoing performance incentives.
• however, for non-partner staff, overly rigid restrictions and the disappearance of the perks of partnership can feel like a career block and risk damaging morale. Parties should consider how to use softer retention tools such as bonus schemes or other career development incentives.

4. Cultural & governance Integration

• moving from a partnership model to a corporate structure is a cultural shift. Governance documents must balance investor control with professional autonomy.
• deals often create tension between senior partners who receive a payout and the wider team who must continue driving growth but see no immediate benefit. Parties should consider retention schemes, equity participation, or bonus pools to maintain morale and alignment.

5. Tax considerations

• LLP structures raise unique issues:

  • allocation of deal proceeds can be flexible but complex.
  • reinvestment by partners is typically post-tax, which can affect their willingness to reinvest and influence deal structuring.
  • post-deal remuneration must consider salaried member rules and NIC exposure, which recent pre-budget rumours placed in the spotlight.

• Moving assets between LLP and corporate entities can trigger tax charges, requiring careful planning.

6. Warranties, indemnities & PI insurance

• it’s common for the buyer to require sellers to fund post-completion PI run-off cover. Parties must agree how this cover supplements or supersedes warranty claims.
• the cost of PI cover is rising. Consolidators need to be aware of the impact of further acquisitions on their premiums.
• focus on compliance with regulatory rules, client confidentiality, and cybersecurity.
• HMRC scrutiny of partner incentivisation structures remains high.

These hurdles are not deal-breakers, they are deal-shapers. With the right advice, they can be managed to unlock long-term value.

Looking ahead

Consolidation in professional services is set to continue, driven by investor appetite and market dynamics. For buyers, success depends on understanding the regulatory landscape, structuring transactions to retain key talent, and managing integration risks. With experience advising on market-leading transactions, Shoosmiths is well placed to guide clients through these complex deals.