Work deriving from the UK's thriving private equity industry is generating some £1.2 billion a year in fees for law firms, research revealed this week.


A report commissioned by the British Private Equity and Venture Capital Association found that more than 200 UK law firms were providing services to private equity firms.



Some 2,000 legal professionals are actively engaged in private equity work, according to the research. More than half of these are employed in international firms based in London.



Charlie Jacobs, global head of private equity at magic circle firm Linklaters, said: 'Private equity represents a significant number in financial terms for most of the firms that play in that market. There is the leveraged side, involving the banks providing finance, and there is the corporate mergers and acquisitions side. Then there are the specialised teams who deal with issues such as due diligence. There are multiple purchasers and multiple advisers.



'Private equity probably represents 5 to 10% of income for the top ten firms, and significantly more for some smaller firms which do a lot of this work, such as Ashurst, Travers Smith and Macfarlanes.'



The research was based on the 2006/07 financial year. Mr Jacobs added that 2008 may see a fall in the legal fees generated by private equity as the 'credit crunch' sets in.



Rachel Rothwell