Private equity has entered the room and the game has changed
There was a time when many professional services firms could succeed by being technically brilliant – but the arrival of private equity into the sector has changed the game, according to Matt Wardrop. Looking ahead, accountants, lawyers and advisers are discovering that technical excellence is no longer enough, the head of business development at KWC Global argues.
The accountant needed to be a great accountant. The lawyer needed to be a great lawyer. Insurance advisers needed to know their markets. Business development often sat somewhere in the background, handled by a select few rainmakers while everyone else focused on delivery.
That world is disappearing. Private equity has entered the room and the game has changed.
Over the last few years, investment houses have poured billions into fragmented professional services sectors including accountancy, legal services, wealth management, insurance, consulting and advisory businesses. The attraction is obvious. These firms often have recurring revenues, loyal client bases, strong margins and opportunities for consolidation. The buy and build model has become one of the most active strategies in the market.
Accountancy, arguably, has become the clearest example. Private equity-backed groups have been acquiring firms, combining businesses, centralising functions and creating larger platforms capable of competing on a greater scale. Firms such as TC Group, Sumer, Azets, Xeinadin, Dains, DJH, Cooper Parry and Gravita and others have expanded aggressively through acquisition, often completing dozens of deals in relatively short periods.
The legal sector is now following a similar path. Lawfront, Foot Anstey, Adeptio, Setfords and Higgs are all great examples. Private equity investment into law firms has accelerated significantly, with investors attracted by fragmented markets, resilient demand and opportunities to create larger platforms through consolidation.
Insurance broking, wealth management, financial advice, recruitment, healthcare, veterinary services and education have all experienced similar consolidation trends. The interesting part is not the transactions themselves. It is what happens after the deal. Because private equity does not simply invest in businesses, but in growth.
When investors deploy capital, they do not generally want to see incremental improvement. They are looking for an inflection point. They want revenue acceleration, cross selling opportunities, market share gains and operational leverage. The clock starts ticking the day the investment completes, and that changes behaviour.
Suddenly, firms that relied, historically, on reputation find themselves needing a more commercial mindset. Partners who built careers on technical excellence are now expected to identify opportunities, deepen relationships and contribute to growth. Entire organisations become more conscious of sales, influence and client expansion.
Growing trend
At KWC Global, we have watched this happen repeatedly across professional services. In many respects, our own growth has been fuelled by the insatiable appetite that private equity brings to its investments. We see it at every level of any organisation. Once investment arrives, growth targets become more ambitious, expectations rise and commercial performance moves much closer to the centre of the agenda.
What is particularly noticeable is that this is not confined to dedicated business development teams. Partners, directors and senior leaders become increasingly engaged in winning work, expanding relationships and identifying opportunities across the client base. They recognise that technical excellence remains essential, but it is no longer sufficient.
At the same time, technical capability is being rapidly augmented by the widespread adoption of AI. Knowledge, analysis and preparation are becoming faster and more accessible than ever before. The differentiator is increasingly not what people know, but how effectively they can bring that knowledge to life in front of clients.
Selling, influencing and persuading are fundamentally human activities. They require individuals to connect multiple moving and often complex parts into a coherent and compelling narrative. They demand judgement, empathy, credibility and the ability to adapt in real time to the concerns and priorities of others. That is why, despite all the advances in technology, the ability to win trust and create conviction remains one of the most valuable skills in business.
Firms that once viewed business development as a specialist activity increasingly expect everyone to play a role. Not because they are becoming aggressive sales organisations, but because growth expectations have fundamentally changed. The irony is that many of these firms are already full of highly intelligent people; the challenge, however, is not intelligence, but influence.
It is a bit like a barrister with an encyclopedic knowledge of the law who struggles to convince a jury. Knowledge matters, but outcomes are often determined by how effectively that knowledge is communicated. Professional services firms often train extensively in technical expertise but far less for the conversations that create commercial outcomes. Private equity tends to expose that gap very quickly.
Consolidation and evolution
As businesses consolidate, synergy savings usually dominate the headlines: shared systems, centralised operations, lower costs, greater efficiency. Those benefits are real. But something else happens at the same time: the human value of influence increases. Because when multiple firms become one, growth no longer comes purely from efficiency. It comes from people spotting opportunities, building trust, persuading clients, leading conversations and converting relationships into commercial outcomes. Technology will accelerate much of this.
Victoria Kirkhope, head of people at UK-wide accountancy practice WBG, observed, “KWC Global’s Rainmaker programme brings to life our theme for the year which is ‘From Capability to Impact.’ The programme will strengthen human relationship skills, foster adaptability, critical thinking and collaboration, and enable our people to navigate challenges and drive sustainable growth.”
AI will help people prepare for meetings, analyse data, identify opportunities and create proposals faster than ever before. But AI does not sit in the room. It does not read the mood of a boardroom. It does not navigate difficult stakeholder dynamics. It does not build trust over dinner. It does not know when to challenge, when to pause or when to push.
The more knowledge becomes commoditised, the more valuable these human skills become. That is why one of the most interesting consequences of the private equity boom may not be financial at all; it may be cultural. An entire generation of accountants, lawyers, consultants and advisers are being pushed towards a new reality where technical excellence alone is no longer enough.
The ability to influence, persuade and build commercial relationships is becoming a core professional skill. Not a sales skill. A life skill. And as private equity continues to reshape professional services, that may be the biggest change of all.
