Business of Law Firms
MJ Hudson to sell funds business — legal division's future uncertain​

By Jake Rickman​

What do you need to know this week?

In this week’s Business of Law Firms series, we return to the troubling developments at boutique advisory firm MJ Hudson, which we reported on two weeks ago.

It has since emerged that MJ Hudson, known for its full spectrum of services offerings to the asset management industry, will sell its UK Fund Management business to two MJ Hudson directors and current shareholders, who will spin out the division into its own business. The deal is valued at approximately $1m.

This follows on from a series of alarming irregularities in MJ Hudson’s accounts that saw the group’s chief financial officer (CFO) removed and the group’s executive and founder, Matthew Hudson, resign.

What does this have to do with law firms? Well, according to The Lawyer, MJ Hudson’s legal division, which sports partners, associates and trainees specialising in funds and asset management work, is still in the lurch, as the group’s future is equally uncertain. Partners with MJ Hudson are allegedly looking to jump ship, and the group’s dozen trainees have had their training contracts terminated effective at the end of this month.

Why is this important for your interviews?

Several months ago, we looked at the business case for law firms engaged in distressed business acquisitions. That is, where a law firm acquires certain practice areas or regional locations of another law firm which is experiencing financial distress, usually for a discount relative to the underlying value of the asset.

Specifically, for the right buyer, acquiring an in-place team of lawyers across the spectrum of seniority at a competitive discount can unlock valuable synergies for the wider firm. The question here is if any firm would be interested in picking up MJ Hudson’s legal team. The opportunity could be a decent one for firms with strong funds and asset management practices like Paul Hastings, Macfarlanes or Travers Smith