Law firm to invest in clients’ funds

A firm founded by former SJ Berwin and Coller Capital executive Matthew Hudson will charge fees based on client success rather than billable hours.

A law firm launched to service the fund management industry will attempt to “more deeply align” the interests of client and advisor, by charging fees based on client success rather than time. The firm, MJ Hudson, will also invest equity in clients’ funds and transactions.

“It is an idea whose time has come,” founder Matthew Hudson said in a statement. “The last two years have emphasised the need to re-think many of the ways people in the financial and legal world do business. From now on, clients will want to know that law firms genuinely understand their needs and want to develop a long term alignment of interests.”

Matthew Hudson

Hudson worked in the private equity and funds group at law firm SJ Berwin in the late 1980s. His career also included stints in the London offices of O'Melveny & Myers and Proskauer Rose as well as periods as an investment principal within a Credit Suisse-sponsored buyout fund and secondaries specialist Coller Capital, according to his firm’s website.

The London-based law firm will take advantage of the incoming Legal Services Act 2007, which from next year will enable firms to adopt “alternative business structures”, allowing them for the first time to sell stakes to private equity funds and other outside investors. The act also allows law firms to offer combinations of legal and non-legal services.

“This legislation should assist the transformation for a traditional law firm away from an annual cash flow model into a long term balance sheet based business, developing an annuity-based and deeper relationship with clients,” the firm said in a statement.

Coller Capital is a founding client of MJ Hudson and its chief investment officer, Jeremy Coller, described the firm’s creation as “a breath of fresh air to clients of the traditional legal profession to be able to use a law firm that prices transactionally and can also invest in a transaction, thereby showing an understanding of and interest in the client and their returns”.

MJ Hudson will act for clients in the areas of private equity, hedge fund, real estate, infrastructure, debt, mezzanine and distressed investments.