Inside a Law Firm That Took Private Equity and Tripled | David Kearney, Wotton Kearney

How does an Australian law firm go from six lawyers to six hundred, stop being a partnership, take private equity, and triple in size? David Kearney, co-founder of Wotton Kearney, explains.

David co-founded Wotton Kearney in 2002 with Phil Wotton: two partners and four other lawyers, focused on insurance law. Today the firm has 14 offices across four countries, around 100 partners, 600 lawyers and a team of more than a thousand.

The structural change underneath that growth is the part most firms are still circling. Wotton Kearney is not a partnership. The people called partners internally are shareholders, and the firm took a minority private equity investment roughly four years ago. It has tripled in size since.

In this conversation David covers what corporatising actually changed day to day, why he draws a hard line between traditional private equity on a three to five year flip and the patient capital they took, how partner remuneration and ownership work under a company structure, and what he says is the one thing he is proudest of across 24 years, which is that the message never changed.

For managing partners weighing external capital, a merger, or a move away from the lockstep partnership model, this is a rare look inside a firm that has already done it.

Connect with David on LinkedIn: https://www.linkedin.com/in/djkearney/ Connect with Kim on LinkedIn: https://www.linkedin.com/in/kimwiegand/

Chapters 00:00 Intro 01:16 2002: two partners, four lawyers, one message 02:20 Building the culture early 04:17 Why they corporatised 05:37 Partners became shareholders 08:30 How remuneration works under a company structure 09:13 The decision to look at private equity 10:44 Tax and distribution in a partnership vs a company 12:08 The Slater and Gordon comparison, and why it's different 13:09 Ten or twelve conversations with PE firms 15:14 Other models emerging in the market 16:48 Bringing the partnership along: the Q&A with the PE firm 18:11 The structure, and why it wasn't just selling a percentage 20:18 Funding technology investment 21:49 Attracting laterals without a lockstep package 25:04 Explaining "business of value" to partners 26:38 Partners investing their own profits back in 28:11 Four years in: what has actually changed 30:33 Buying shares instead of a remuneration increase 31:29 The board, governance and finding a new chair 36:03 What corporatising means for clients 39:15 Technology, AI and the leverage model 41:17 46 graduates, their biggest intake 42:25 Pricing pressure in the insurance market 46:48 Where the mid tier goes from here 49:58 The redundant metrics traditional partnerships still use 51:05 Share price as a metric 54:24 Engaging senior lawyers on the path to partner 57:07 Taking a different structure to market 58:08 How partners work together on client growth

Capital + Counsel is about capital, governance and technology reshaping the business of law.