* M&M considers $1 billion-plus stake sale to a private

equity partner

* PE firms target services businesses that can benefit

from AI

* Founder says IPO is in the distant future, cites

regulatory hurdles

By Sabrina Valle and Milana Vinn

NEW YORK, June 5 (Reuters) - Morgan & Morgan, the

largest U.S. personal injury law firm, has hired JPMorgan ( JPM )

to explore a minority stake sale that could pave the way

for a public listing years from now, according to two people

familiar with the matter.

The family-controlled firm is weighing a deal that could

raise more than $1 billion and bring in an outside partner with

experience in preparing businesses for the public markets,

particularly private equity investors with a track record of

executing initial public offerings.

Professional services firms, including law firms and

consulting firms, have emerged as a growing focus for private

equity investors, drawn by their steady revenue and potential to

use AI to improve efficiency and profitability.

PRIVATE EQUITY STAKES

The U.S. restricts non-lawyers' ownership of law firms to

prevent profit maximization from prevailing over clients'

interests. But private equity can benefit from growth by taking

a position, for instance, in back office divisions, using a

management services organization structure.

Recent deals using this model include private equity firm

Trive Capital buying a stake in law firm Massumi + Consoli and

Orion Legal buying a position in law firm Dudley DeBosier.

Morgan & Morgan is exploring a similar structure, with a

private equity firm that could expand and professionalize the

business in preparation for a potential IPO, one of the people

said.

Morgan & Morgan co-founder John Morgan told Reuters in a

response to questions that the discussions are early and that

any capital raise remains uncertain.

"Like many firms in America, we are being approached

constantly, and we listen," Morgan said. "We are fortunate that

we are a highly profitable firm that really doesn't need money

to invest in growth."

John and his wife, Ultima Morgan, both lawyers, founded the

firm in 1988 and turned what was a small business into a

nationwide operation with offices in all 50 states. It has

funded expansion with the firm's own profits, without external

cash.

M&M said by e-mail it has annual revenue of $2.4 billion.

The couple controls Morgan & Morgan with their children -

Matt, Michael, Daniel and Kate - with equity partners owning the

rest. The sons work as lawyers at the firm alongside their

parents.

John Morgan said there would be ethical and regulatory

issues involved in taking a law firm public, making any such

plans distant.

JPMorgan ( JPM ) declined to comment.