A private equity investor has taken a quarter stake in a law firm with designs on tripling its network of branches.

Business Growth Fund (BGF), which has stakes in more than 70 small and medium-sized businesses, has bought a 26% share of the equity in McMillan Williams and will occupy a minority number of board seats.

A spokesman for the firm said the ultimate aim is to float on the stock exchange, but there are other options; follow-on funding from BGF, a secondary buy-out or a trade sale.

He added that the investor would retain 'limited' influence in the day-to-day running of the firm and their funding is to provide capital and expertise rather than management services.

The south-eastern firm is expected to post revenue of £17m in this financial year and derives around a quarter of its income from legal aid work. Practice areas include conveyancing, personal injury, family and crime.

This deal is believed to be the largest private equity investment in a firm with such a focus on legal aid cases.

The investment will fund the opening of eight new offices over the next two years with 75 new solicitors and other legal staff recruited as part of the expansion. The firm has already grown from five offices in 1995 to 18 today and will move into Worthing, Tunbridge Wells, Wimbledon and Ealing in the coming months.

Erin Hallock, senior investment manager at BGF, who will join the McMillan Williams board, said: ‘We can add real financial support and guidance to support management in their plan to open new sites in London and the south-east.

‘Their roll-out strategy is proven and future expansion therefore is eminently achievable.’

McMillan Williams is led by founding partner John McMillan, chief executive Colum Smith (pictured) and 20 other partners.

As part of the deal, McMillan Williams has simultaneously become an alternative business structure, transferred the partnership to a limited company and opened the firm's new central London office at London Bridge.

The firm has stated its belief that clients want face-to-face contact with their legal advisers and has targeted 50 branches by the end of this decade.

BGF, which invests between £2m and £10m in smaller businesses, has a total fund of £2.5bn and a portfolio featuring dozens of companies, ranging from a drainage contractor to a luxury furniture retailer. The company was advised by PwC and Pinsent Masons on the McMillan Williams investment.