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Australian firm first to float

AN AUSTRALIAN law firm has become the first in the world to float on a public market.

7 June 2007

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AN AUSTRALIAN law firm has become the first in the world to float on a public market.

Melbourne-based Slater & Gordon, which specialises in personal-injury litigation work, listed on the Australian Stock Exchange on 21 May, when shares surged 40 per cent from A$1 to A$1.40 at the close of its first day’s trading. The firm succeeded in raising the $35m wanted to fund expansion plans.

Slater had already acquired five smaller practices and currently has 21 branches across five states. It now expects to generate revenues of A$58m for 2007.

Managing director Andrew Grech said the listing would not affect the way the firm operated or the sort of cases it would work on. “Everyone profits from the law. I don't think that's going to be earth-shattering news, to be frank,” he commented.

Nevertheless, the move was watched closely by law firms and legal commentators in the UK. A change in Australian legislation – allowing non-lawyers to invest in law firms from 2001 – resembles long-awaited options that will be open to UK law firms when the Legal Services Bill is enacted. On its way through parliament, the Bill has just received its second reading in the House of Commons and is expected to receive Royal Assent later in 2007.

Although UK observers argue top City firms such as the magic circle are very unlikely to seek external investment, it is thought private equity or an IPO will be more attractive to medium-sized and smaller firms as the market continues to consolidate.

Jeremy Black, director in the professional practices group at Deloitte & Touche LLP, believes the impact of external investment will be most significant at the smaller end of the market. “We expect to see the number of sole practices and small partnerships currently in existence decrease significantly,” He explained. “There is likely to be significant consolidation and aggressive expansion.”

However, he added that a number of mid-tier firms could opt to float, most likely on AIM. “If you look for precedents, we have seen accountants, management consultants, patent attorneys, architects and chartered surveyors float. 

“An Australian firm may be the first to float, but it is highly likely a UK firm will follow in due course.”

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