You know that feeling when you find out the last mom-and-pop shop on your block just got bought by the same guy who owns the car wash chain, the HVAC company, and the pest control outfit down the street? That's not a coincidence. Private equity has spent the last fifteen years buying up every fragmented, boring, recurring-revenue business in America. Laundromats. Veterinary clinics. Plumbing outfits. Roofers. The formula is always the same: find an industry where nobody owns more than a sliver of the market, buy a bunch of small operators cheap, bolt them together, and sell the whole platform for a much bigger multiple than you paid for the parts. It works so well it has a name, the roll-up, and it's been the dominant strategy in lower-middle-market PE since the 2010s.
But there was always a wall PE couldn't get past. Not a regulatory wall exactly, a professional one. Doctors, dentists, lawyers, these are people who need a license from the state to do their job, and in most states, only a licensed person is allowed to own the business that does that job. That's the corporate practice of medicine doctrine for physicians, and it has a cousin for lawyers called Rule 5.4. For decades those doctrines were the moat. You could buy the plumber. You could not buy the doctor. That moat is long gone.
Quick intro if you're new here. I'm Carl, by day I run Joseph Black Law PLLC, a New York law practice where I work on startup and venture capital transactions, entertainment, music deals, and investment fund structures. By night, and honestly during a lot of stolen lunch hours, I write The Dime💰.
The Dime💰 exists for one reason: the most interesting financial stories in America run through culture, and almost nobody covers them with both the spreadsheet and the source material open at the same time. The music press covers the artist. The financial press covers the companies. The Dime💰 covers the deals.
In the world of PE we'll talk about what's changed. PE didn't get the law changed. The lawyers helped them get smarter about the paperwork.
The workaround, and why it works
The structure is called a Management Services Organization, or MSO, and once you understand it you'll see it everywhere, because it's basically the same trick applied to dentistry, medicine, and now law. The licensed professional keeps 100 percent ownership of the actual practice, the entity that holds the license and treats the patient or represents the client. That's the "friendly PC." Everything else, the real estate, the equipment, the billing system, the marketing, the HR department, the IT stack, gets sold to a separate company the investors actually own, the MSO. The two entities are tied together by a long-term Management Services Agreement, and the MSO charges the practice a management fee for running the business side of the business. The PE firm never technically owns the doctor. It owns everything the doctor needs to function.
Roughly 33 states enforce some version of the corporate practice of medicine doctrine, which is exactly why the MSO model became the standard architecture for healthcare investment banking rather than an occasional workaround. It's not a loophole anymore. It's the industry.
Dental got there first, and it's basically done
Dentistry was the test kitchen. As of 2024, 16.1 percent of US dentists were affiliated with a dental support organization, double the 2017 rate, and more than a quarter of dentists within a decade of graduating. There are roughly 130 PE-backed DSOs operating right now, and dental logged more than 120 add-on acquisitions in 2024 alone, more than any other healthcare category that year. TUSK Practice Sales tracked at least 175 dental locations changing hands to DSOs and PE groups in just the first half of 2026, and TUSK, citing ADA data, puts the industry at roughly 35 percent consolidated already.
The names by now are basically household names if your household happens to include a dentist. Heartland Dental, backed by KKR, runs more than 2,500 offices. Aspen Dental is Leonard Green and Ares. MB2 Dental is Charlesbank and Warburg Pincus. Practices with $1 million or more in EBITDA are trading at 5 to 12 times EBITDA depending on scale, and an ADA-affiliated study in Health Affairs found the share of dentists affiliated with private equity nearly doubled from 6.6 percent in 2015 to 12.8 percent in 2021. That trajectory did not slow down, it kept climbing.
Medicine is a few years behind dentistry on the same curve
Physicians are following the same path, just later. The AMA's biennial Physician Practice Benchmark Survey found that 6.5 percent of physicians characterized their practice as private-equity owned in 2024, up from about 4.5 percent in both 2020 and 2022. That sounds small until you look at the bigger picture it sits inside. Physician ownership of their own practice has collapsed from 53.2 percent in 2012 to 35.4 percent in 2024, roughly 80,000 fewer privately owned physicians than a decade earlier. Hospital ownership grew from 23.4 percent to 34.5 percent over the same stretch, and by the start of 2024, private equity firms owned at least 386 hospitals, roughly 30 percent of every for-profit hospital in the country.
A Health Affairs study by researchers at Berkeley tracked PE-acquired physician practices and market penetration by specialty from 2012 to 2021 and found penetration increased substantially across that window, and a separate study found physicians at PE-sold practices were 16.5 percentage points more likely to leave within two years of the sale than physicians at practices that stayed independent. That's the human cost side of the ledger, and it's worth sitting with for a second before we get to why the money side works so well.
Now it's coming for the people who write the contracts (Me)
Here's the part that should get your attention if you're in my line of work. The same MSO structure that dentistry and medicine spent thirty years perfecting is now being deployed against law firms, and it's happening fast.
In January 2026, Louisiana personal injury firm Dudley DeBosier announced a partnership with Orion Legal MSO, backed by Uplift Investors, which stated the ambition plainly, build a national roll-up platform for personal injury practices the same way DSOs did for dental. Uplift didn't stop there. It closed a $670 million debut fund in July and signed a fourth MSO deal with a Rhode Island PI firm on July 22. In Arizona, Rafi Law Group launched its own MSO, Rafi Law Services, with $125 million from an unnamed PE backer, at a reported valuation of roughly $450 million. Cohen & Gresser, an elite boutique, is reportedly in PE negotiations of its own, with its founder citing more than a decade of preparation for institutional capital. McDermott Will is exploring an MSO transaction. This is not a fringe experiment anymore, it's the exact same playbook, running one industry behind where medicine already is.
The regulatory patchwork is doing what patchworks always do, which is create the gaps sophisticated capital slides through. Arizona eliminated its version of Rule 5.4 entirely and built a licensing regime for it. Puerto Rico now lets nonlawyers own up to 49 percent of a law firm. Utah runs a regulatory sandbox. Texas allows lawyers and outside investors to hold equity in the MSO itself, as long as the MSO isn't paid a cut of legal fees. And the US legal services market, $426.7 billion in 2025 and still growing by IBISWorld's count, is exactly the kind of enormous, fragmented, no-single-player-above-a-sliver market that makes a roll-up strategist's mouth water. No court has ruled on where the line actually sits between permissible management services and impermissible control of a law firm. Nobody's tested it yet. That uncertainty is a feature for the first movers, not a bug.
Why now, and why this is actually a different animal than what PE usually buys
So why the professions, and why right now? Two things, at the same time.
First, PE has an enormous amount of cash sitting around with nowhere obviously good to put it. Global dry powder, meaning capital that's been raised but not yet invested, peaked north of $2.6 trillion in late 2023 and was still sitting around $2.18 trillion as of last spring. That's an enormous pile of committed capital that needs a home, and the traditional homes, industrials, retail, straight leveraged buyouts of normal operating companies, have gotten more expensive and more competitive. Meanwhile healthcare PE deal value alone went from $60 billion in 2023 to $115 billion in 2024 to a record $190 billion in 2025. That's more than tripling in two years. Money follows where the returns are, and the returns have been in the licensed professions.
Second, and this is the part that actually matters for how you should think about this trend, buying a licensed practice is a fundamentally different acquisition than anything PE is used to making. When a firm buys a manufacturer or a retail chain, it's buying assets, cash flow, and a management team it can replace if it wants to. When it buys into a medical practice, a dental group, or now a law firm, it's buying proximity to a person the state has decided must retain independent professional judgment, whether that's a doctor's clinical decision or a lawyer's duty to the client. The MSO structure exists precisely because PE cannot own that judgment directly. It can only own everything around it, and then use the management contract, the billing system, the equipment lease, and the employment of every non-licensed staffer to make that judgment as commercially convenient as possible. That's a genuinely different kind of leverage than owning a widget factory, and it's why healthcare's three decades of MSO experience is the cautionary tale everyone citing the law firm deals keeps pointing back to: arrangements that start with clean governance have a documented history of drifting.
Why it's such a good trade
Strip away the ethics questions for a second and just look at the mechanics, because the mechanics are genuinely elegant. You're buying into industries that are wildly fragmented, no dental group, no physician practice management company, no law firm anywhere controls more than a sliver of its market, which means there's an almost unlimited runway of small targets to buy cheap and roll into a bigger platform. You're buying recurring, largely non-discretionary demand. People need their teeth fixed and their gallbladders removed regardless of what the Fed does with rates, and a personal injury client doesn't shop around on price the way a retail customer does. You're capturing the classic roll-up arbitrage, buy the small practices at 4 to 6 times EBITDA, sell the combined platform at 8 to 12 times, and the multiple expansion alone does a lot of the work before you've improved a single operation. And you're locking in the cash flow through a management services agreement that typically runs long enough, and is structured tightly enough, that lenders are comfortable underwriting debt against it the same way they'd underwrite any other contracted revenue stream.
Put that all together and you get why licensed practices are being called the last frontier. Every other fragmented, recurring-revenue slice of the American economy has already been rolled up. The professions were the one category that had a legal wall built specifically to keep outside capital from owning the judgment of the person doing the work. That wall is still standing, technically. It's just that the MSO gave PE a very good set of blueprints for building around it, and dentistry proved the blueprints work at scale, medicine is proving it at scale right now, and law is exactly where dentistry was about a decade ago.
As a person who's done several MSO deals in the past 4 years. I'm waiting to hear what PE has for me. Wood Smith sold today for 18 times EBITDA. The future looks bright. That's it for this week's edition of The Dime💰. Don't be stingy with the 🏀. Pass this to a friend.
See y'all next week.
CJB