HSBC research shows rising law firm interest in private equity and growing tech budgets
Law firms across the UK are becoming increasingly receptive to private equity investment and global expansion, according to new research released by HSBC UK. The sixth edition of HSBC’s Law Firm Strategy and Investment Report, published on 31 October 2025, reveals a marked rise in firms’ openness to external capital and a continuing increase in technology spending across the sector.
The research, based on a survey of more than 90 senior representatives from UK law firms, found that nearly a quarter of respondents now view private equity as a more attractive growth option compared with two years ago. In response to a question asking how perceptions of private equity had changed over the past two years, 24% of firm leaders said it was now either more attractive or a lot more attractive, up from 17% in 2024.
According to HSBC, the findings suggest a growing acceptance that external investment can help law firms achieve greater innovation, operational flexibility, and competitiveness. Victoria Ritchie, Head of Professional Services at HSBC UK, said the figures reflect a shift in strategic mindset across the legal industry. “Firms are recognising the potential of external capital to fuel growth and innovation, allowing them to remain competitive in a rapidly changing market,” she said.
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The survey also found that 45% of respondents identified international expansion as a core element of their firms’ future growth strategy. North America and the Middle East were named as the top regions of interest, with 42% of firms prioritising the United States and Canada, and 31% targeting markets across the Gulf region. Interest in the rest of Europe remains steady, with 40% of firms continuing to view the continent as a key area for expansion. The findings follow a trend of major UK firms launching new offices in overseas jurisdictions over the past year, including recent expansions into Saudi Arabia and other fast-growing legal markets.
The report highlights that alongside these ambitions, firms are committing increasing proportions of their budgets to technology. Law firms are now spending an average of 6.5% of their annual revenue on information technology, up from 6.1% in 2024. HSBC said the increase demonstrates the profession’s commitment to innovation, efficiency, and digital transformation through the adoption of artificial intelligence tools, data platforms, and process automation. Ritchie added that this investment is a sign that firms are focusing on long-term resilience and improved client delivery through technology.
The research also reflects a broader evolution in the business models of law firms, with a growing number exploring non-traditional financing structures within the framework of Alternative Business Structures permitted under UK regulation. The move towards private equity and increased technological investment suggests that many firms are looking to balance financial sustainability with modernisation in response to client demand and competitive pressures.
HSBC said the results demonstrate a sector that is adapting rapidly to external economic and technological forces. The combination of capital investment, digital transformation, and cross-border growth is shaping a new commercial model for legal practice, one in which firms are less dependent on traditional partnership structures and more open to external collaboration. The bank noted that this willingness to embrace change is essential for maintaining competitiveness in the global professional services market.
The 2025 Law Firm Strategy and Investment Report builds on five previous editions and provides one of the most detailed analyses of the legal sector’s business outlook from a financial perspective. HSBC said it expects to see continued momentum in investment appetite, both in private equity participation and in technological capability, as law firms seek to strengthen profitability and client service delivery in the years ahead.