The owner of top-50 firm Taylor Rose has insisted its finances are in fine shape, despite reports that a potential private equity buyer has pulled out of takeover talks.
According to the Sunday Times, transatlantic investor Nordic Capital stepped away from a potential buyout during the due diligence phase, ending plans for its first ever foray into the legal sector. The investors were reported to have been deterred by the government’s proposal to take between 50% and 75% of the client account interest earned by law firms.
In the year to 30 September 2025, Taylor Rose made £6.64m income from net interest on client accounts, having brought in £7.39m the previous year. The firm’s pre-tax profit for 2024/25 was £9.8m.
The firm, which is part of the AIIC Group, would not comment on takeover speculation but pointed to its most recent group results, published in April, as a sign of the continued resilience of the underlying business. The group reported record financial performance for the year ended 30 September 2025, with revenue increasing by 27.4% to £124m and adjusted earnings before interest, taxes, depreciation and amortisation rising to £12.2m.
A spokesperson said: ‘Our underlying profitability has strengthened materially regardless of client interest, even as we continue to invest significantly in our multi-year IT transformation programme. This investment – more than £10.5m in the year ending September 2025 - is designed to support long-term growth, improve efficiency and enhance client service, and positions the business strongly for the future.’
In May this year, Adrian Jaggard stepped down as chief executive of Taylor Rose to focus exclusively on his same role with AIIC Group. Antony Jaggard became chief executive of Taylor Rose, moving from his position as a director of consultant services at the firm, in which he led the growth and development of the firm’s legal consultancy business.
The government’s consultation on the Interest on Lawyers’ Client Accounts (ILCA) scheme ended in March and attracted objections from across the legal sector. Critics said there were still questions about where the money would be allocated and how firms holding client money would pay for the safeguards they are required to put in place.
Andy Burnham's likely ascent to Number 10 could see justice secretary David Lammy replaced, leaving the future of the ILCA plan even more unclear. If the policy remains, commentators say investors will be wary of pouring money into businesses who will soon be forced to surrender such a lucrative iincome stream.
Adil Taha, strategy specialist with Taha Capital, said this additional nervousness from private equity houses comes as no surprise. 'More sophisticated investors are arriving at the gates of UK legal, they understand the model better, they can monitor live investments in the sector, they can see the risks clearer and they are very happy to say “not for us”,’ he said.
‘We flagged the client account interest position within UK Legal over a year ago, when we realised going through the data, that firms were accruing amounts that were bolstering equity partner profits by up 50% in some cases. Whilst the Bank of England have kept rates still earlier this month, and with rate rises more likely than reductions, both the Ministry of Justice UK and Solicitors Regulation Authority are looking to reallocate this income back to clients or the wider justice system.’
Jeff Zindani, managing director of mergers and acquisitions adviser Acquira, said the wider issue surrounding the client account interest proposal is how some firms will stay afloat if they were to lose the income it generates. 'The real consolidation story is the hundreds of regional firms facing rising costs, succession problems and shrinking margins — many of which have leaned on client account interest just to stay profitable,’ he added.
‘Tellingly, when this was first mooted last year, we saw a spike in enquiries from firms telling us this would be the final nail in the coffin for them.’
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