Private equity has moved through healthcare, dental, and accounting. Law firms are next — and the deals are already happening. But most law firm leaders don't fully understand the structure, the math, or the risks involved.
TJ Henry is the co-founder and managing partner of Federate, a management services organization that launches, operates, and scales law firms. He's also one of the most knowledgeable people in the country on how MSO structures work, what investors are actually looking for, and what law firm founders need to know before they sit down at the table.
In this episode — part of the Sometimes Tuesdays legal-specific series — TJ joins Scott Love for one of the most detailed, practical conversations the Rainmaking Podcast has ever had on law firm M&A, private equity, and the MSO model.
You'll learn:
What an MSO actually is — and why it's the legal workaround that makes third-party investment in law firms possible
How 20-year contracts, EBITDA calculations, and per-timekeeper fees actually work in these deals
Why a $100M revenue firm doesn't generate $100M in EBITDA — and how to find the real number
What realistic deal multiples look like right now (and why low-to-mid teens should make you nervous)
Why the lawyers most likely to get a deal done are the ones willing to stay and grow — not the ones looking to cash out and leave
The three levers every PE investor needs to pull to run a profitable MSO deal: EBITDA arbitrage, law firm growth, and cost reduction
What investors get wrong when they try to buy into law firms without law firm operators on their team
The difference between a roll-up model and a multi-firm MSO — and the conflicts-of-interest issue that makes one harder than the other
Why small to mid-sized firms are actually better deal targets than AmLaw 200 firms
What "law firm in a box" looks like — and how Federate can get a new firm up and running in 60 days
If you're a law firm founder, managing partner, equity partner, or investor evaluating the legal services market — this episode is required listening.
Visit: https://therainmakingpodcast.com/
YouTube: https://youtu.be/lGP1mVGOMzE
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If you are a successful law firm partner or law firm founder and want to hear about other options, please book a time on Scott Love's calendar here:
https://calendly.com/scott-736/half-hour-phone-meeting-with-scott
Or email Scott to connect with him at: scott@attorneysearchgroup.com
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This show is sponsored by Leopard Solutions Legal Intelligence Suite of products, Firmscape, and Leopard BI. Push ahead of the pack with the power of Leopard. For a free demo, visit this link: https://www.leopardsolutions.com/index.php/request-a-demo/
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About TJ Henry:
T.J. Henry is a seasoned legal operations and law firm executive with a track record of helping law firms and legal businesses launch, grow, and scale. He specializes in strategic transformation, operational design, and growth, with a focus on building the infrastructure, teams, technology, and systems that allow legal organizations to operate more effectively. T.J. is the Co-Founder and Managing Partner of Federate, where he works with law firms and investors across the legal industry.
Links:
https://federatelegal.com/contact/?utm_source=rainmaking_podcast&utm_medium=referral&utm_campaign=rainmaking_podcast
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