What else has private equity been buying up, after businesses in prison systems, health care clinics and public water systems? Lately, one answer has been legal directories and rankings publications, which highlight particular law firms or attorneys by practice area.

In the last year, some of the largest legal ranking and search companies have been acquired by private equity firms, including Chambers and Partners and Best Lawyers.

The new ownership has led to concerns among some Am Law 200 chief marketing officers, who wonder whether the companies will be more aggressive in pricing and products, and whether the confidential information that law firms submit to them will be used for new purposes. The executives of two companies with new ownership, however, insist the law firms' data will continue to be treated confidentially, and that they aren't under new orders to pursue high price models.

Still, some firms have started to limit the information they submit, according to a CMO of an Am Law 100 firm who asked not to be named. “We're just being a lot more careful about the information we provide,” the CMO said.

Buying Spree

Private equity ownership of legal industry publications is not new. (ALM Media was acquired by a consortium led by EagleTree Capital, formerly Wasserstein Partners, in 2014.) But buyout firms were especially attracted this year to rankings publications.

In March, Inflexion supported the buyout of Chambers and Partners, marking the end of nearly 30 years in which the company was held solely by founder Michael Chambers.

Two months later, private equity firm Levine Leichtman Capital Partners acquired Best Lawyers, which operates through the Best Lawyers, Best Law Firms and Lawyer Directory brands. The deal marked the end of more than 30 years of ownership by Steven Naifeh, who founded the company with the late Gregory White Smith. The same private equity firm this year also bought London-based Law Business Research, which publishes the directory Who's Who Legal as well as Global Arbitration Review and Latin Lawyer.

Meanwhile, earlier in the year, Internet Brands, a KKR portfolio company, bought attorney directory site Avvo and then rebranded its online legal network Martindale-Avvo.

Lloyd Pearson, a London-based consultant to law firms for submissions to the rankings, said private equity firms see the ranking companies as “very reliable businesses,” with high engagement rates in the profession year after year.

“If you were to take the Am Law 100 and see which ones advertised in Chambers, you would see a high majority of them do,” he said, adding, “There's hundreds and hundreds of law firms that all do very similar things, so from a commercial perspective, that creates tremendous opportunities.”

For rankings publications such as Chambers—a key marketing venue for most Am Law 200 firms—law firms often submit confidential information concerning matters such as government investigations of executives and ongoing M&A deals, sometimes naming clients, Pearson said. That allows the research and ranking companies to appreciate the quality of the firm's work, on the condition they won't share the information, he said.

The new ownership of some ranking companies is testing that level of trust, according to interviews with several marketing executives at large firms.

“There's an assumption that information will be monetized, whether they sell it as part of a research product or sell it as part of a research package,” said one law firm CMO who spoke only on condition of anonymity to candidly describe the anxiety. Previously, the CMO's firm would describe a pending deal without naming the client, but as a result of the concerns of new ownership, the CMO's firm has begun to limit information about pending deals and client panels and knows of other law firms doing the same, the source said.

“We're just in wait-and-see mode,” the CMO said. “We just don't know what the information will be used for.”

A second CMO of a large firm asked what will happen “when you have a change of ownership, and change of ownership toward a model that's inherently focused on short-term profit return?” The concerns are amplified with the introduction of the General Data Protection Regulation, known as GDPR, a recent privacy law in Europe, the CMO added.

Still, the source said that hasn't changed how the law firm interacts with Chambers. “You've got to continue this in good faith,” the CMO said. “Our No. 1 priority is the confidentiality of the clients' data, and when you have a change in ownership, we just have to watch it very closely.”

'Sacrosanct' Data

Executives of the newly brought rankings companies are quick to dispel any concerns.

“Confidential information,” said Mark Wyatt, CEO of Chambers and Partners, “is sacrosanct for us” and “it will always be treated as such by Chambers.” He said Chambers has “never had a situation where any form of confidential information has not been used for the purposes it was given to us,” adding, “we've never had a breach.”

Wyatt said that Chambers was fully GDPR compliant and continues to make investments “to make sure we're as protected and confidential” as possible.

He said there's “a complete wall between the research side and the commercial side of the business. The information provided by the firm will only be seen or used by the people it was intended for and that will remain so.”

Wyatt, addressing concerns over aggressive pricing, said, “I don't think you can push law firms around.” Rates have not gone up since the sale, but rate increases would be considered as Chambers rolls out enhancements to web functionality and products, he said, adding, “I think the value proposition of what we're able to give law firms is going to improve.”

Chambers has invested in its research platform, Wyatt said, noting it now has 214 researchers who speak more than 20 languages. In early 2019, Chambers will open offices in New York and Brazil, he said.

He said the deal this year means Chambers can reinvigorate its resources, including technology for storing data, access and managing data. “You'll see enhanced new web functionality,” he said. Wyatt, who returned to Chambers this year after previously serving as a managing director there, said Chambers is not just a rankings publication but an “analytics firm” for law firms.

“The first phase of post-acquisitions is really getting closer to our people and getting closer to our markets,” Wyatt said, “to make sure everything we do going forward adds value to every stage of the process.”

For his part, Phillip Greer, the CEO of Best Lawyers, said the new ownership means having a partner that has expertise in operating companies.

“We have access to consulting knowledge, a wealth of knowledge and expertise in industries,” he said. “We can speak with other companies they have acquired. We can take advantage of their financial acumen.”

But Greer, who was president of the company before the deal, said the “core business, the day-to-day, everything stayed the same.” Levine Leichtman Capital recognized “we know the market, they want to keep everything as is,” including how the company interacts with law firms and gathering data, he said.

Greer added that Levin Leichtman “understands how confidential our data is” and “all that data still stays in-house directly with us, under appropriate security protocols.” He said the company has “different layers of authentication” for accessing information and “we've set clear boundaries who can see what data.”

He said using firms' information without permission “would be a poor decision” and “would damage the relationship and brand we have.” Meanwhile, he said, “there's been no message from the top saying, 'you must be more aggressive, you much change prices.'” There haven't been any price increases outside of what normally occurs in any other year, he said.

Strange Relationship?

Pearson, the consultant, said law firms and their marketing staff are naturally cautious—and some are not well disposed to the rankings companies in the first place.

“Their teams get drained by it [the rankings] and it sucks an enormous amount of time and resources away,” he said. But law firms continue to submit to the publications because “they provide a tremendous outlet” in the market and a prominent platform. “Every law firm that complains [about the rankings] will be eagerly participating in whatever they do. It's a very strange relationship,” he said.

Pearson said he hasn't seen any significant changes from the rankings companies this year, although he predicted some of them may have to increase pricing and offer firms more products.

For his part, Pearson said he believes the fears of the companies misusing confidential information are overstated.

“These publications would be foolish if they were to do anything like that, because they could destroy their reputations quite quickly,” Pearson said. “It would kill them overnight.”

As Chris Hinze, global head of communications of Hogan Lovells, put it, having an “objective assessment of the legal market is valuable for clients and firms alike.”

”Firms invest a significant amount of time and money in the directories,” Hinze said. “The challenge to the publishers is to demonstrate real value.”