TRP 337: [Legal] Law Firm Mergers: Private Equity/MSO Activity with TJ Henry

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