If you run a mid-size litigation support company, you’ve likely heard one piece of advice repeatedly: “Focus on EBITDA.” And it’s true – Earnings Before Interest, Taxes, Depreciation, and Amortization, a.k.a., EBITDA is the foundation of most valuation models. But in today’s M&A market, where consolidation is accelerating and competition for high-quality assets is fierce, buyers are assessing far more than a company’s earnings.
Litigation support is a nuanced industry with varying service lines, margin profiles, client types, and technology capabilities. As a result, buyers incorporate a richer set of value drivers into their decision-making than many sellers realize. Understanding these factors early (ideally years before a transaction) can increase your valuation and strengthen your negotiating leverage.
This blog breaks down how buyers actually value litigation support companies today and what you as an owner can do to maximize exit outcomes.
EBITDA: Still the Backbone of Valuation
EBITDA remains the baseline metric for determining enterprise value. Most litigation support companies trade on a multiple of adjusted EBITDA, typically adjusted for:
- Owner/founder compensation
- Non-recurring legal or technology expenses
- One-time client projects
- Excess personal or discretionary spending
Buyers don’t just look at current EBITDA. They assess EBITDA quality and durability. Smooth revenue, diversified clients, and recurring or repeatable service lines command higher multiples.
Tip: Normalize your financials early and document any adjustments to strengthen credibility.
Revenue Mix and Margin Quality Matter
Litigation support service lines vary dramatically in margin profile and predictability. Buyers scrutinize:
Service line composition:
- High value – eDiscovery processing/hosting, forensics, and managed review
- Moderate value – Trial graphics, trial presentation services
- Lower value – Commoditized scanning or reprographics
Companies heavily weighted toward higher-margin recurring services typically earn premium valuations.
Client concentration risks:
According to common buyer criteria in the lower-middle-market, companies generating 30-50% of revenue from one or two clients are typically viewed as having elevated concentration risk, even when EBITDA is strong. Buyers prefer diversified revenue streams across multiple firms, industries, and geographies.
Tip: Shift resources toward higher-margin, tech-enabled services and gradually reduce reliance on low-margin or highly concentrated accounts.
Technology Stack and Automation Capabilities
A modern, secure tech stack demonstrates operational maturity and reduces perceived integration risk for buyers. Since the litigation support industry is evolving quickly, buyers are paying close attention to:
- Proprietary workflows or automation
- Hosting platforms and licenses (e.g., Relativity, Reveal, Everlaw)
- AI-assisted review capabilities
- Cybersecurity maturity
- Chain-of-custody controls
Even if a company is not “tech-first,” a strong, secure technology foundation signals operational discipline and reduces post-acquisition risk.
Tip: Invest in automation, cybersecurity, and updated hosting/licensing agreements to signal scalability and efficiency.
Talent, Leadership, and Operational Infrastructure
A company with a strong EBITDA – but a fragile leadership bench – can be a very risky acquisition. A business that runs smoothly without the owner involved day-to-day is considerably more valuable.
Here’s what buyers look for:
- Depth of project managers and forensic examiners
- Founder dependence
- Documented operating procedures
- Ability to scale without chaos
- Culture and turnover trends
Tip: Strengthen your document processes to show your business can scale independently of the founder.
Repeatability and Predictability of Revenue
While few litigation support firms have true recurring revenue, many have repeatable revenue, i.e., consistent work from ongoing matters, regional law firms, or corporate legal departments. Buyers reward companies with recurring or repeatable revenue streams because they provide stability and forecastability post-acquisition. Remember: Predictability equals stronger EBITDA multiples.
Buyers appreciate:
- Multi-year contracts
- Managed services agreements
- Ongoing discovery partnerships
- Cross-sell opportunities across service lines
Tip: Analyze your revenue patterns over the past 3–5 years and identify which service lines or client types produce the most consistent work. Prioritizing and nurturing these segments helps demonstrate long-term stability to buyers.
Market Position and Differentiation
Differentiation – whether through specialization, region, workflow, or technology – creates defensible value that buyers can’t easily replicate. In a crowded industry, clear differentiation drives value. This is why buyers ask:
- What does your company do better than competitors?
- Is it geography, specialization, technology, pricing, or speed?
- What would be difficult for a competitor to replicate quickly?
Companies with a unique identity and defensible strengths tend to command higher strategic valuations.
Tip: Clarify your unique strengths and highlight proof points such as niche expertise, superior turnaround times, or specialized certifications.
Growth Story and Future Upside
A compelling, data-backed growth narrative enhances valuation by giving buyers a clear vision of the company’s future trajectory.
Examples include:
- Expanding into new regions
- Adding adjacent services, like managed review or forensics
- Investing in automation for operational efficiency
- Partnering with legal tech platforms
- Already winning RFPs typically awarded to larger players
Buyers don't just buy what your company is – they buy what it can become under their ownership.
Tip: Prepare a simple roadmap outlining expansion plans, new service lines, partnership opportunities, or operational efficiencies already in motion.
The Importance of Preparation and Clean Financials
One of the biggest risks in the M&A process is disorganized financials, which can lead to valuation reductions; clean books accelerate the process and increase buyer confidence. Ensuring you have clean, audit-ready books will:
- Increase buyer confidence
- Speed up due diligence
- Reduce the likelihood of a price reduction
- Help your advisor defend your valuation
A professional sell-side process can increase valuation significantly compared to informal conversations with interested buyers.
Tip: Ensure your accounting is accurate, reconciled, and ready for scrutiny at least 12–18 months before going to market.
Why Expert M&A Guidance Matters in This Industry
Selling a litigation support company is not like selling a generalized service business. Buyers – both strategic and private equity – evaluate assets using industry-specific criteria that many sellers don’t know until it’s too late.
An experienced M&A advisor in the litigation support sector, like the Kenyon Group, will:
- Normalize EBITDA correctly
- Position your service lines for maximum valuation
- Create a competitive bidding environment
- Identify strategic buyers who will pay more for synergies
- Guide you through diligence, earnouts, and post-close terms
- Protect you from undervaluation
Industry-wide M&A benchmarks show that a competitive, well-managed sale process can increase valuations by 20-40% compared to informal or one-off buyer conversations. Working with an industry-focused M&A advisor, like Kenyon Group, can materially increase competition, multiples, and closing certainty.
Tip: Engage an advisor early to benchmark your valuation, identify strategic buyers, and position your company for maximum premium.
Valuation Is About the Entire Story
EBITDA is just the starting point: The true value of your litigation support company lies in the strength of your client relationships, technology, talent, processes, and future growth prospects. So, if you’re considering selling now or planning a future exit, understanding what buyers value today is essential for capturing the strongest outcome.
Ready to understand what your litigation support company is truly worth?
Our team specializes in advising mid-size eDiscovery, forensics, trial services, and document review firms through successful exits.
Schedule a confidential valuation conversation today and take the first step toward a stronger outcome.