AI-Native Law Firms Use MSOs to Unlock VC and PE Capital
- Source
- Financial Times
- Time
- 9:58 PM
- Weight
- 94/100
A new wave of AI-native legal startups is increasingly adopting the Management Service Organization (MSO) model to navigate long-standing regulatory restrictions on law firm ownership. In the United States, professional rules generally prohibit non-lawyers from holding equity in law firms, a constraint that has historically prevented legal practices from accessing traditional venture capital or private equity.
By restructuring as MSOs, these firms can separate their technical and administrative operations from the actual practice of law, allowing them to scale their technology infrastructure independently. Under this framework, a business entity provides specialized software, management, and administrative services to a separate, lawyer-owned professional corporation.