The investors who backed Taylor Rose to the tune of nearly £5 million have defended the firm after it was reported private equity pulled out of a potential acquisition, citing the firm’s exposure to client account interest as a factor in the decision.
Earlier this week it was reported Nordic Capital withdrew from a potential £120 million buyout of Taylor Rose. It is understood part of that decision was in response to uncertainty over the future of client account interest following the Ministry of Justice’s (MoJ) consultation on Interest on Lawyers’ Client Accounts Scheme (ILCA), which would see the interest on client accounts remitted to the government for investment in the wider justice system.
Now two of Taylor Rose’s backers have defended the firm’s finances and business model, describing them as “strong” and “fundamentally sound” and pointing to record group results for the year ended 30 September 2025, with revenue rising 27.4% to £124 million and adjusted EBITDA reaching £12.2 million, as evidence of the continuing resilience of the underlying business.
Colum Smith and John McMillan provided investment to Taylor Rose during the Covid-19 pandemic in May 2020 (£750,000), and November 2020 (£4.1 million) to support the firm’s growth, and separately held shares in AIIC Group, the parent company of Taylor Rose.
The pair were present throughout the period in which Taylor Rose grew from a mid-market firm into one of the largest consultant-led law firms. Taylor Rose recently announced it had grown to over 1,000 consultants across its Taylor Rose, FDR Law and Kingsley Wood consultant brands by the end of 2025, in addition to its employed staff.
McMillan said of the growth: “When we supported Taylor Rose during 2020, we believed the business had the potential to become a major force within the UK legal market. To see it grow beyond 1,000 consultants and exceed £100 million in annualised revenues has been hugely rewarding.”
Smith added the growth reflected the hard work and commitment of Adrian Jaggard and his leadership team, staff and the consultants across the group.
Filings on Companies House confirm both investors exited in April 2026 following a share buy-back, realising close to three times their original investment. On their exit, McMillan said: “Achieving close to three times our original investment is clearly pleasing, but the real achievement is the scale and quality of the platform Adrian and his team have built. The business has developed significant momentum, supported by investment in technology, infrastructure and people, and we remain confident about its future direction.”
Smith added: “AIIC is on a transformational, investment-heavy journey from Taylor Rose as a law firm to an MSO multi-law firm business, positioned to change the legal industry. PE will be back to invest in AIIC as that journey completes.”
Commenting on the exit, AIIC Group chief executive Adrian Jaggard said: “The transaction results in a more concentrated shareholder base while leaving the group’s strategy unchanged. We remain focused on the next phase of growth.”
The robust response comes amid reports of law firms using client account interest to financially support their firms, particularly conveyancing firms due to the amount of money transacted through client accounts. Taylor Rose made £6.64 million in net client account interest income in the year to 30 September 2025, against a pre-tax profit of £9.8 million.
On the client account interest debate, Smith said: “Client account interest is not a business model – it is a natural consequence of scale. When you build a platform of this size, processing significant client funds as a matter of course, interest accrues as a by-product of that activity.
“The management services organisation model I developed at Taylor Rose as chief vision officer works. It was designed to scale, and scale is precisely what it has achieved. At near-zero interest rates nobody gave this a second thought. The scrutiny now is a function of the rate environment, not of any fundamental flaw in the platform.”
In response to the speculation, a Taylor Rose spokesperson said its “underlying profitability has strengthened materially regardless of client interest”, pointing also to more than £10.5 million invested in a multi-year IT transformation programme during the same period.
There is speculation that a change of leadership at the MoJ following Sir Keir Starmer’s departure could see the ILCA plans shelved entirely.
