If you missed it, The Financial Times is reporting that ‘Private equity overcomes California hurdle to expansion in US legal market’ stating that:

Private equity has scored a partial victory in its push to expand in the US legal market, after lobbyists softened legislation in California that threatened to disrupt liberalisation of law firm ownership rules.
Attorneys in the country’s largest state will be allowed to partner on some legal work with investor-owned law firms under the terms of a law signed by Governor Gavin Newsom.

What Does This Means for the US Legal Market?

By far the largest legal market in the world, what does this development mean for the future of the US – indeed Global – legal market?
While this compromise isn’t a full liberalisation of the Californian (let alone US) legal market, along with the recent liberalisation of neighbouring Arizona’s legal market, which now allows non-lawyers to own law firms under an “alternative business structure” (ABS) model, it’s certainly a crack in the door.
For private equity, it’ll be a sign that resistance to change from within the profession can be negotiated down. For California’s legal establishment, it’s a signal that – finally – the status quo is no longer politically or economically inevitable. For the Global legal market, it’s further evidence, if it were needed, that despite all of the challenges that come with owning a law firm, private equity very much remains interested in this asset class.