Business of Law Firms
MJ Hudson in trouble​

By Jake Rickman​

What do you need to know this week?

Welcome to this week’s article in TCLA’s Business of Law Firms series.

On Monday, The Lawyer confirmed that MJ Hudson, a boutique advisory service specialising in funds, alternative investments, and private markets, had terminated the training contracts of its dozen trainee solicitors.

This dramatic decision follows on from weeks of controversy and speculation over the firm’s future. As The Lawyer notes, MJ Hudson suspended its chief financial officer and director in December 2022 due to irregularities with the group’s finances, having first emerged several weeks earlier in October. Around this time, MJ Hudson announced it would not meet its annual financial disclosure deadline due to “audit adjustments related to a major contract”, according to Reuters.

Then in February, the firm’s auditor, EY, announced it was renouncing its post, citing a loss of trust in the firm’s senior management. Shortly thereafter, the firm’s founder and CEO, Matthew Hudson, resigned.

Before these unsettling developments, Hudson had enjoyed a prominent reputation as a lawyer and investment professional in the private equity, funds, and alternative investment markets. According to Hudson’s LinkedIn profile, before he founded MJ Hudson in 2010, he co-founded the private equity law firm SJ Berwin (since merged with Hong Kong firm King & Wood Mallesons) and built out the London presences of both O’Melveny & Myers and Proskauer & Rose. He also co-founded two private equity houses.

Why is this important for your interviews?

It remains unclear what exactly is the cause of MJ Hudson’s financial entanglement. Absent any concrete disclosures, we can only speculate. But underpinning this development is the haunting spectre of misfeasance or even fraud because oftentimes, where there is smoke — i.e., the sudden suspension of a firm’s financial director and the resignations of its CEO and auditor — a fire later emerges.

Separately, any time a firm terminates its trainees is a cause for scrutiny because it is a relatively rare and drastic step that usually signals profound financial distress and a management crisis.

That said, as far as law firms go, MJ Hudson’s business model is far from typical. For starters, it is not, strictly speaking, a law firm. Instead, it is a professional advisory service that caters almost exclusively to clients working in the asset management and funds spaces. It offers a suite of services across four segments, including data and analytics, professional advisory (including law), outsourcing, and organic investments (per Reuters’ business profile). Moreover, the firm went publicly on the London Stock Exchange’s secondary market, the AIM, in 2019. However, MJ Hudson’s shares were suspended from trading in December following the announcement of its financial reporting irregularities.