"Legal services is a sector private equity is definitely keen to invest in," says Bowmark Capital partner Tom Shelford. "You will continue to see more activity, driven mainly by financial investors, but there will also be more IPOs."

Shelford's confidence that PE money will continue to flow into the legal market comes in the wake of Bowmark's investment in flexible lawyering service LOD (Lawyers on Demand).

The deal, which went live in May, saw Bowmark become the alternative legal provider's majority shareholder, ending LOD's longstanding relationship with Berwin Leighton Paisner (BLP) – now Bryan Cave Leighton Paisner (BCLP) following this April's transatlantic merger.

LOD co-founder and managing director Simon Harper (pictured), who launched the business while still a partner at legacy BLP, describes the decision to seek outside investment as a move he has always been "ultimately openminded to", characterising the deal as "a big step, but the right big step".

"This is something we have thought about pretty much ever since we originally spun the business out of BLP in 2012," Harper says. "It felt like it was the right time to take investment to grow the business and take it to its next stage. There was a lot of interest in LOD, which meant it was a very positive process."

Shelford, whose father Bill was senior partner at legacy Cameron McKenna while Harper was a trainee with the firm, says Bowmark has been looking to invest in the legal sector "ever since alternative business structures were first mooted". LOD is not the private equity house's first foray into the legal market, having previously invested in legal publishing company Law Business Research.

Shelford says LOD was ripe for investment given its expansive growth by both revenue and geography. More than 750 lawyers around the world are currently registered with LOD, roughly 250 of which are in the UK.

"The business' revenue has grown strongly at around 20% a year and it is now very international," Shelford explains. "The overall macroeconomic picture favours LOD's business model as companies experiencing lower growth rates look for ways to maintain profit margins through more efficient procurement processes and flexible cost bases."

Shelford points to the increasingly large legal budgets controlled by general counsel and the pressure to be more efficient in terms of legal spending as examples of the market shifting in a positive direction for LOD.

"GCs now manage an increasingly large legal budget compared to five or 10 years ago, and are being asked how they make their spend as efficient as possible. As a result, demand is growing to unbundle work from law firms to specialist providers, as well as the development of managed legal services." Shelford adds. "That offers a substantial opportunity for an alternative legal services provider such as LOD to grow their share of the market as a whole."

LOD, which is run by Harper, co-founder Jonathan Brenner and CEO Tom Hartley, started to seriously consider outside investment about 12 months ago, meaning discussions with Bowmark were already well underway when news of the merger between legacy BLP and St-Louis headquartered Bryan Cave went public.

Bowmark's investment saw BCLP sell its 62.36% stake in LOD; however, Harper says the two deals were "quite separate". He is also keen to add that while any financial ties between LOD and BCLP have gone, LOD remains a service provider to the transatlantic firm.

The capital provided by Bowmark's investment will be used primarily to invest in LOD's core business, Harper says. However, there are also plans to bolster its managed solutions offering and expand geographically – with a US launch topping the list of priorities.

"Managed solutions – where we have got teams of lawyers wrapped in with project management, technology and data to support those lawyers on projects – has been growing really quickly," says Harper. "We are seeing growth in in-house teams looking for people to help augment what they are doing on a legal operations side, and we will continue to invest in that area heavily."

Harper says LOD is "openminded towards opening in the US, through an original LOD launch or an acquisition".

John Knox, founder of Asia-Pacific-based AdventBalance, which merged with LOD in 2016, relocated to the US in June, with a view to spearheading a LOD launch across the pond.

Shelford is equally bullish about overseas expansion. "A key area of focus is going to continue to be acquisitions – this business has benefited from mergers and acquisitions in the past, and one of the reasons for the capital raising is to support that further," he says.

"We are keen to undertake the right acquisitions as soon as we can. We want to consolidate LOD's position as one of the top global providers in alternative legal services and we are actively looking to undertake acquisitions in all geographies that the business operates in, as well as new areas such as the US."

The pair are clearly confident about the growth potential of the business, with Harper saying that globally LOD receives an average of 300-400 applications a month to join its roster of lawyers. However, he is also keen to stress that the ethos of the business will not change with any increase in scale.

"The important thing for LOD and for our lawyers is that the growth is not about changing the basic philosophy, which is about putting our lawyers at the centre of what we do," Harper says.

"That is the thing that has made our growth work so far."