How Private Equity Actually
Values a Personal Injury Law Firm

Private equity does not buy the number on your P&L. They buy adjusted EBITDA — a number that shifts significantly once owner comp is normalized, non-interest expenses are stripped out, and personal costs running through the firm are removed. The number you end with is almost never the number you started with. And where your firm lands in the 3x-10x multiple range is not luck or timing. It is a direct function of six specific, measurable factors: financial infrastructure, case mix diversification, marketing channel concentration, forward pipeline visibility, operational systems, and brand equity. The difference between a 3x and a 7x multiple on a $5M EBITDA firm is $20 million dollars. That is the entire conversation.

This video covers exactly how PE actually values a PI law firm — the math behind adjusted EBITDA, why clean financials alone can move your multiple by one to two turns, how case mix affects severity and predictability premiums, why any single channel or referral source above 25% of revenue is flagged as a liability before PE underwrites a single dollar of upside, and why the firms that prepare 12 to 24 months out consistently receive top-of-range multiples while unprepared firms get marked down on every lever simultaneously. If you are three to five years from an exit, this is the framework that should be driving every major decision your firm makes between now and then.