The global law firm explores a new structure that could open the door for private equity investments in U.S. legal practices, testing long-standing ethics rules.
Chicago, Illinois, 11 November 2025 – McDermott & Schulte, one of the world’s largest law firms by revenue, is reportedly exploring a restructuring plan that would allow it to sell a stake to private equity investors, a move that could reshape the boundaries of law firm ownership in the United States.
According to people familiar with the discussions, the firm is studying a model that would let outside investors share in its revenue stream without breaching ethics rules that prohibit non-lawyers from owning law firms. While no agreement has been finalized, the idea marks a significant moment for an industry that has traditionally been closed to outside investment.
The proposed structure would divide the firm into two entities: one lawyer-owned business offering legal services, and a separate managed service organization (MSO) that would handle back-office operations, brand licensing, and technology services. Investors could hold equity in the MSO, allowing them to earn revenue indirectly from the law firm’s success.
This model mirrors structures already used in other regulated sectors, such as healthcare and accounting, where private equity firms have successfully invested through management service entities.
Zack Coleman, son of McDermott’s chair, Ira Coleman, is said to be leading the exploratory effort. Before joining the firm as senior director of business opportunities, Zack worked at private equity group Odyssey Investment Partners and investment bank Moelis. Sources say he has been in talks with bankers, advisers, and private equity firms to understand how such a structure could work.
“As one of the fastest-growing, most successful modern law firms, we are constantly approached and we always listen to new ideas,” said Ira Coleman in a statement to the Financial Times. “We’re excited to learn from other leading organizations as we challenge the status quo.”
Formed earlier this year from the merger of McDermott Will & Emery and Schulte Roth & Zabel, the Chicago-based firm reported $3 billion in annual revenue in August, placing it among the top 20 firms globally.
If McDermott proceeds, it would be the first major U.S. law firm to adopt such a model. The approach could provide fresh capital for investment in artificial intelligence, technology infrastructure, and talent acquisition — areas where law firms increasingly compete. Proponents argue that access to private funding could help firms modernize operations and attract top lawyers through equity incentives, especially in a profession that bans non-compete clauses.
However, critics warn that the model could blur ethical lines. American Bar Association (ABA) rules currently ban non-lawyer ownership of law firms, a safeguard meant to prevent commercial influence on legal advice. While states such as Arizona have already approved alternative business structures that permit private equity involvement, large-scale adoption in the legal sector remains rare.
Legal analysts point to a recent Texas ethics opinion that showed openness toward the MSO model, suggesting regulators may be warming to innovation in firm ownership structures. Lawyers at Holland & Knight noted that MSOs could “assist law firms in innovating and professionalizing their operations,” signaling a possible shift in the professional services landscape.
Meanwhile, investor interest in the legal sector is growing. Burford Capital, known for pioneering litigation finance, has expressed interest in acquiring minority stakes in U.S. law firms. Some investors view the legal industry as one of the last untapped frontiers for private equity, with opportunities for early movers to secure valuable positions.
For now, McDermott’s discussions remain in an exploratory stage. But if the firm moves ahead, it could set a powerful precedent, paving the way for a new era of capital-backed law firms and redefining how the business of law operates in the modern economy.
