Private equity is not entering professional services through one front door. It is entering through multiple side doors at once, each designed around a different structural weakness in the partnership model. Sometimes capital buys a firm. Sometimes it buys a capability. Sometimes it builds a challenger from scratch. And sometimes it does not buy anything at all, but assembles a competing system around the existing one. What looks like a fragmented set of transactions is, in reality, a coordinated pattern that is repeating across markets and geographies. (Accountancy Europe – PE in Accountancy, Financial Times – PE targeting accounting firms, IFIAR Statement)
That matters because the traditional protections of the profession were never designed for this type of entry. Partnerships align local owners and preserve independence, but they do not prevent selective extraction of value. Networks coordinate firms, but they do not control where capital enters. Regulation can slow full takeovers, but it does not prevent partial ones. Private equity has not broken these systems. It has simply navigated around them and shown that the firm does not need to be acquired in full to be reshaped. (Accountancy Europe – Ownership Models, Financial Times – Audit risks)
The result is a change in how the profession is understood. Firms are no longer seen as indivisible partnerships but as collections of assets, capabilities, and positions in attractive markets. Once that perspective takes hold, the question shifts. It is no longer whether the firm is strong. It is which parts of it can be separated, financed, and scaled elsewhere. That is the shift that turns isolated deals into a structural transformation.
Play 1: Rebuild Instead of Buying
The cleanest way to enter a market is often not to buy into it, but to ignore it. Private equity-backed platforms increasingly choose not to negotiate with existing firms at all. They hire senior teams, bring capital, and build a new firm without legacy constraints. No partner politics, no inherited cost base, no historical compromises. The launch of WTS in the UK, backed by EQT and led by former Big Four leadership, is not an exception. It is the purest form of this play. Entry without permission. (WTS, EQT, Financial Times)
What makes this model dangerous is not its size, but its proposition. Traditional partnerships are built on delayed gratification. Years of progression, uncertain economics, and a final prize that has become less predictable over time. Capital-backed challengers invert that equation. They offer clearer economics, faster upside, and a structure that feels more like a company than a political system. Unity Advisory in the US is a clear example. Built by former senior figures from EY and PwC, it does not ask talent to wait. It asks them to switch. (Financial Times, Harvard Business Review, McKinsey)
This is why incumbents consistently underestimate this play. They look at these firms and see small competitors. What they miss is that scale is not the first objective. Substitution is. These platforms start in narrow, high-value segments where expertise is scarce and relationships are portable. Once they establish credibility, they expand. Not by replicating the full model of a Big 10 firm, but by selectively replacing the parts that matter most. The real shift happens when the best people stop seeing the partnership as the default destination. At that point, the system is no longer defending itself. It is being bypassed.
Related case studies and analysis:
Play 2: Roll Up the Fragmented Market
Roll-ups look simple because the surface logic is obvious. Fragmented market, stable cash flows, predictable targets. Buy a platform, add firms, create scale. That is the theory. The reality is more aggressive. Private equity is not just consolidating firms. It is rewriting an ownership model that was never designed to be consolidated. Thousands of small and mid-sized practices exist because the partnership model favors local control over central efficiency. Roll-ups don’t compete with that structure. They dismantle it, one acquisition at a time. (International Accounting Bulletin)
Germany’s Afileon makes this visible in a way few markets have so far. Backed by Partners Group, it did not position itself as another network. It built a platform. Dozens of locations, more than a thousand employees, and a clear mandate to scale beyond what traditional partnerships would tolerate. The language around it still borrows from the profession. Partners, firms, collaboration. But the underlying logic is different. This is not a federation of peers. It is a capital-backed operating company that happens to wear the clothing of a partnership. (Afileon)
The UK shows where this play becomes difficult. Platforms like Azets scaled rapidly, acquiring dozens of firms in a few years. Others, like Xeinadin, hit valuation limits when buyers started questioning whether the platform was more than the sum of its acquisitions. This is where the roll-up either becomes a company or collapses under its own structure. Buying firms is now a repeatable capability. Integration is not. Systems don’t align, cultures don’t merge, and partners don’t automatically become managers. The uncomfortable truth is that most roll-ups don’t fail because they can’t acquire. They fail because they never become one firm. (Financial Times)
Related case studies and analysis:
Play 3: Carve Out Capabilities from Member Firms
Carve-outs do something that acquisitions do not. They test the integrity of the firm itself. For decades, certain capabilities were treated as inseparable from the partnership. They relied on the brand, the client base, and the internal referral engine. That assumption held as long as nobody tried to break it. Restructuring is the clearest example. Valuable, relationship-driven, but structurally awkward inside audit-led firms where conflicts, independence rules, and internal priorities limit its growth. The tension was always there. Private equity simply decided to act on it.
KPMG’s sale of its restructuring business to create Interpath was not just a divestment. It was an experiment. Could a capability that had always existed within a larger firm operate independently and scale? The answer came quickly. Interpath did not remain a carve-out. It repositioned, expanded, and attracted further private equity investment from Bridgepoint. What had once been constrained by the logic of the firm began to follow the logic of a platform. That shift matters because it cannot be undone once the market has seen it work. (H.I.G. Capital, Financial Times)
Teneo’s acquisition of PwC Australia’s restructuring business pushes this further. This is no longer about separation. It is about aggregation. Capabilities are lifted out of partnerships and combined into new platforms with a different ambition and a different growth model. This is where the dynamic becomes irreversible. The first carve-out proves independence is possible. The second proves it is repeatable. After that, the question is no longer whether parts of the firm can exist outside it. The question is how many of them will. (Reuters)
Play 4: Buy Capabilities at Network Level
If carving out a capability from a member firm tests the integrity of the firm, doing it at network level tests the integrity of the network. For decades, global capabilities were seen as proof that certain things could only exist inside the Big 10 structure. Cross-border delivery, shared methodologies, integrated client service. These were not just advantages. They were the argument for why the network mattered. That argument holds only as long as those capabilities cannot survive outside it. Private equity is now testing that assumption directly.
PwC’s sale of its global mobility business to create Vialto Partners was the clearest break with that logic. This was not a local carve-out. It was a globally integrated capability, operating across jurisdictions, with embedded client relationships and delivery structures. The assumption was that this kind of business needed the network to function. The transaction proved the opposite. It could be separated, capitalized, and operated independently. Once that happens at network level, the idea that the network is structurally necessary begins to weaken. (PwC)
But Vialto also exposed the trade-off that comes with independence. Outside the partnership, there is no implicit buffer. Costs are explicit, leverage is real, and performance is measured differently. Reports of debt restructuring discussions made that visible. Separation creates strategic freedom, but it also removes protection. What was once part of a system becomes an asset that must stand on its own. That tension is not a weakness of the model. It is the model. And once the market accepts that globally integrated capabilities can be separated, it becomes much harder to argue that the network itself is indispensable. (Reuters)
Related case studies and analysis:
Play 5: Buy Member Firms Inside the Network
Private equity does not need to buy a global network to control it. It only needs to control a few of the right member firms. Networks were built on the assumption that their members are broadly aligned. Similar ownership structures, similar time horizons, similar incentives. That assumption breaks the moment capital enters selectively. Once a few firms operate under a different logic, alignment stops being the default. It becomes negotiation.
Grant Thornton shows how quickly this changes the system. New Mountain Capital’s investment in the US firm did not remain a national event. It became the foundation for a multinational platform, expanding into Ireland and then into continental Europe with acquisitions in France, Spain, and Belgium. At the same time, Cinven took positions in the UK and Germany. None of these transactions bought the network itself. But together they shifted where capital sits, where decisions are made, and who sets the pace. The network remains formally intact. The center of gravity moves elsewhere. (Financial Times, Grant Thornton)
Baker Tilly shows what happens once that shift begins. When capital entered the US firm through Hellman & Friedman and Valeas, it did not stay passive. The combination with Moss Adams, valued at roughly $7 billion, turned one member firm into a platform capable of consolidating others. At that point, the network stops being a coordination mechanism and becomes a competitive landscape. Some firms become acquirers. Others become targets. And once that dynamic is visible, it becomes self-reinforcing. The uncomfortable reality is this: the network is no longer a partnership of equals. It is a system where capital-backed firms increasingly define the outcome. (Reuters, Baker Tilly)
Related case studies and analysis:
- Case Study 27: Baker Tilly and Private Equity – When a Network Starts Becoming a Platform
- Case Study 23: The Fragmentation of a Global Firm – How Private Equity Is Reshaping Grant Thornton
Play 6: Separate the Service Line
This is the play everyone understands and almost nobody has executed successfully at scale. The logic is obvious. Advisory, tax, and deals carry the growth, the margins, and the valuation of the profession. Audit carries the constraints. If you want to unlock value, you separate them. On paper, this looks straightforward. In reality, it cuts through the core of how these firms actually function. Shared clients, shared economics, shared power structures. Separation is not a transaction. It is surgery on the operating system of the firm.
EY’s Project Everest was the first serious attempt to do this at scale, and that is exactly why it matters. It was not a banker’s pitch or a local experiment. It was a global plan to separate audit and advisory and create a standalone consulting business with access to capital markets. The fact that it collapsed under internal resistance is not a sign that the idea was wrong. It is proof of how much value sits in advisory and how hard it is to extract it from a partnership structure built to keep it inside. The failure did not close the door. It showed where the door is locked. (Reuters)
What followed was not abandonment, but fragmentation of the strategy. Interest from CVC in EY Italy’s advisory business shows how the same logic reappears at a smaller scale. Instead of one global separation, investors test local ones. They probe the system where resistance is lower, where governance is simpler, where partners are more aligned. This is how structural change usually happens. Not through one decisive break, but through repeated attempts at the edges. The first large split failed. The smaller ones will keep coming. And over time, they will make the large one possible again.
Related case studies and analysis:
- Case Study 22: The $600 Million Failed EY Split (“Project Everest”)
- Case Study 24: PwC’s “Monday” – How a $20bn Spin-Off Fell Apart
- Case Study 26: Accenture – The Success Story That Was Never Meant to Happen
Play 7: Make the Network Less Relevant
The most powerful move is also the least visible. Private equity does not need to dismantle networks to change the industry. It only needs to make them less relevant. Networks were built to coordinate partnerships across geographies, align standards, and protect the brand. That worked as long as they controlled the key assets: talent, capabilities, and capital allocation. Once those start to sit outside the network, its role changes. It still exists, but it no longer defines how the system works.
Grant Thornton again shows how this shift happens in practice. A US-led, capital-backed platform expands across geographies, while other investors take positions in parallel member firms. The network is still there on paper. Same brand, same structure, same coordination mechanisms. But strategically, something has changed. Decisions are increasingly driven by entities that control capital, not by those that coordinate relationships. The network does not disappear. It becomes secondary. (Grant Thornton)
This is the point many boards still miss because they are asking the wrong question. They ask whether the network could be acquired. That is unlikely in the near term. The more relevant question is whether it still matters once enough of its critical components are controlled elsewhere. That is already happening. And once it crosses a certain threshold, the network does not need to be dismantled to lose influence. It simply stops being the place where strategy is set. The profession will not be reorganized in one transaction. It will be reorganized piece by piece. And most firms will only recognize that once they are already part of the process.
Related case studies and analysis:
Closing Thoughts
These seven plays are not separate strategies. They are parts of the same system. Each one removes a different assumption that used to hold the profession together. The greenfield challenger shows that talent does not need to stay. The roll-up shows that fragmentation is not stable. The carve-out shows that capabilities do not need the firm. Member-firm acquisitions show that networks can be influenced without being owned. And the failure of large-scale splits shows something just as important: the economic logic of separation is strong enough that it keeps coming back. This is not experimentation. It is iteration.
The common thread is not private equity. It is modularity. Professional services firms were historically held together by complexity, culture, and professional identity. That made them difficult to change, but it also made them difficult to analyse. As these firms become more measurable, more standardized, and more transparent, that protection weakens. What used to be understood as an integrated whole starts to look like a set of components with different economics, different growth profiles, and different strategic value. And once something can be broken down like that, it can also be reassembled differently.
This is why the story extends beyond accounting firms. It is about how capital enters systems that believe they are protected by structure and regulation. It rarely attacks them directly. It studies how they actually work, identifies where alignment is weakest, and moves through those points first. In professional services, those paths are no longer theoretical. They are visible. And once a path becomes visible, it stops being exceptional. It becomes repeatable. The profession will not change in one move. It will change because the same moves keep working.
Viewed together, these developments increasingly resemble what I described later in The Two-Speed Firm: the gradual emergence of multiple economic and operating systems inside the same professional-services organizations. As private capital enters selectively, some parts of the industry are becoming faster, more centralized, more technology-driven, and more platform-oriented, while other parts remain governed through traditional partnership economics and local autonomy structures. The result may not be the replacement of the partnership model altogether, but increasingly the coexistence of fundamentally different operating realities underneath the same global brands. In that sense, private equity may not simply be reshaping ownership structures inside professional services. It may be accelerating the fragmentation of the industry into multiple economic systems operating at different speeds inside the same firms.
What This Means for Boards
Boards that still frame private equity primarily as a future risk may already be underestimating how deeply capital has entered parts of the professional-services industry. Private equity is no longer approaching the sector from the outside alone. In many areas, it is already embedded within operating structures, talent markets, platform investments, carve-outs, acquisition strategies, and alternative ownership models, often in ways that are less visible than traditional control transactions.
The more relevant question is therefore not simply whether external capital enters the firm, but where the organisation is most exposed to it and how that exposure evolves over time. In practice, that exposure is rarely uniform. It tends to concentrate around specific capabilities, geographies, service lines, delivery structures, talent pools, and operational assets that can be scaled, separated, or integrated more easily than the broader partnership itself.
That leads to a more difficult set of questions, and often the ones boards are least structurally prepared to answer clearly. What actually holds the firm together in operational and economic reality? Which capabilities genuinely depend on one another? Which member firms still behave primarily as integrated partners within a common system, and which increasingly operate more independently? Where does institutional dependency actually sit, and which parts of the business could potentially function separately if external pressure tested the boundaries of the model?
These are no longer purely theoretical governance questions. They increasingly resemble the same questions investors, acquirers, and platform operators already analyze when evaluating the industry.
Boards should therefore not assume that historical structures, brand alignment, or regulatory boundaries alone will necessarily preserve the current shape of the firm indefinitely. Capital tends to move through systems along the paths where operational integration, economic scalability, and structural separation are most achievable. The firms that understand those dynamics early may still retain greater influence over how change unfolds. The firms that do not may increasingly find themselves reacting to structural shifts that were already underway long before they became fully visible.
I work with boards and executive teams on independent perspectives related to professional-services transformation, governance, operating models, platform economics, and the changing economics of professional-services firms.
If your leadership team is working through similar questions around ownership structures, governance alignment, investment pressure, or operating-model evolution, you may find my Future of Professional Services board sessions and Transformation Reality Review valuable. Feel free to reach out.
Sources
Primary Sources
- Grant Thornton US – Strategic Growth Investment from New Mountain Capital
- Baker Tilly & Moss Adams Combination Announcement
- Moss Adams and Baker Tilly Join Forces
- Citrin Cooperman Receives Investment from Blackstone
- EQT – Acquisition of Baringa
- Interpath Advisory – H.I.G. Capital Investment
- Bridgepoint – Acquisition of Interpath Advisory
- Vialto Partners – Strategic Investment from CD&R
- Forvis Mazars Global Network Information
- BDO Global Strategy and Network Information
- Afileon – Official Group Information
Secondary Sources
- Reuters – Baker Tilly and Moss Adams Combine in $7bn Deal
- Reuters – Grant Thornton US Sells Stake to New Mountain Capital
- Financial Times – Private Equity Moves Into Accounting Firms
- Financial News – Grant Thornton UK Partner Pay and Cinven Deal Analysis
- Bloomberg – Accounting Firms and Private Equity Trend Coverage
- The Economist – Professional Services and Private Capital Analysis