Clifford Chance won a High Court victory with a decision ruling that raids carried out on two IVF clinics run by fertility doctor Mohamed Taranissi were unlawful.
The Human Fertilisation and Embryology Authority (HFEA), accompanied by the police, searched the London clinics in January.
The High Court quashed both search warrants obtained by the HFEA regulatory body and awarded Taranissi his costs, which are estimated to be in excess of £1m.
The HFEA told the High Court that it accepts the statement on which it applied for warrants to search the Assisted Reproductive and Gynaecology Centre and the Reproductive Genetics Institute was not "legally watertight".
The case was expected to go to a full hearing in early July after a judge granted permission for a judicial review three months ago.
Michael Smyth, Clifford Chance head of public policy and lead partner on the case, said: "It's highly unusual in my experience for a regulator with statutory backing more or less to concede your entire case at the door of the court. Still more for it to admit that its evidence was inadequate and that its action in seeking the warrants was unlawful."
An HFEA spokeswoman said: "We would wish to stress that the HFEA acted in good faith and on advice.
"Our aim is to protect patient safety and ensure patients’ choice, and we regret any distress that may have been caused to Mr Taranissi's patients."
Smyth instructed David Pannick QC of Blackstone Chambers as lead counsel, while the HFEA was represented by Morgan Cole partner Graham Miles, who instructed lead counsel Dinah Rose QC, also of Blackstone.