Private Equity houses are naturally focused on optimising capital to ensure the best return on investment. In the third and final of this three part series, based on our experience working with UK and US PE firms, we examine the opportunities that legal spend management solutions present to PE houses to optimise and uplift the value of their portfolio companies.
The buy-to-sell nature of Private Equity places high pressure on operating partners to make changes quickly and maximise investment returns from the acquired businesses. We have observed that successful portfolio company leaders collaborate with PE house teams to optimise their company cash flow, increase profit margins, and achieve lean operations through streamlined costs and capabilities.
Our PE clients have found that having visibility of their portfolio companies’ ongoing legal spend allows them to find synergies and reduce spend on duplicate or related issues across their portfolio. A joint legal spend management strategy also presents opportunities to benefit from economies of scale made possible through the volume-based discounts the PE firm has negotiated with key law firms.
Apperio’s legal spend analytics and matter tracking platform provides the visibility that Private Equity firms need to manage legal costs across their portfolio and in-house teams. This allows PE operating partners to analyse spend volumes and trends, identify economies of scale, enact longer-term process changes and find savings that increase the profitability of portfolio companies and maximise the returns for the Private Equity fund.
We’d love to talk to you about how this could work in practice for your firm. To find out more about Apperio, book a demo now.
If you enjoy this post, you might also like:
Part 1. PE fundraising: increasing returns through improved granularity and visibility of legal spend
Part 2. PE deal making: ensuring profitability through internal and external legal spend oversight