Law firm valuations?

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April 25, 2026

by a searcher from University of Pennsylvania - The Wharton School in Los Angeles, CA, USA

I'm thinking about different industries and have been looking into the law firm space, specifically personal injury firms. I understand that an MSO would need to be set up, and we have an exceptionally strong team, so all set there. Anybody know what EBITDA multiples look like here, at various sizes ($1m EBITDA, $5m EBITDA, $20m+ EBITDA)? What about EBITDA margins? It would be really helpful.
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Reply by a professional
from University of the Incarnate World in Austin, TX, USA
A few thoughts: This is a different beast from typical LMM deals, and not just because of the MSO structure. PI firms have some unusual earnings quality characteristics worth flagging if you end up doing diligence on one. The big one is contingency revenue. PI firms don't recognize revenue until cases settle, which means the income statement is always a lagging picture of the actual case inventory. A firm can look mediocre on paper while sitting on a pipeline of settlements that haven't hit yet ... or the reverse. Standard EBITDA analysis needs to be supplemented with case inventory aging, average settlement values, and historical conversion rates. Without that, the multiple you're applying is floating. The other thing to watch is attorney dependency. In personal injury specifically, referral relationships often live with individual attorneys, not the firm. If a rainmaker leaves post-close, you may be looking at a very different business than what you underwrote. On multiples - I don't have current market data for PI firms specifically and wouldn't want to guess. This is a niche enough space that I'd want to see actual comps before saying anything useful. Worth posting that question to a legal industry M&A group or finding a broker who specializes in professional services transactions. They'll have the deal-level data.
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Reply by an intermediary
from University of Notre Dame in Los Angeles, CA, USA
The upcoming uber legislation is depressing value for CA firms but it's still the most attractive market. Anywhere between 6-10x depending on docket mix, size, etc. I have lots of experience in this space so feel free to message me with questions.
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