NATIONAL FIRM Slater & Gordon looks set to be the world’s first publicly listed law firm, ahead of Perth-based Integrated Legal Holdings (ILH).
Slater & Gordon lodged its prospectus with Australian Securities and Investment Commission (ASIC) last week with an offer period opening on 11 April and closing on 27 April. The plaintiff law firm hopes to list on or about 14 May with $35 million raised by the initial public offer of shares valued at $1.
Managing director Andrew Grech hopes the listing will go ahead without any hiccups.
“We obviously don’t want to pre-empt the process but the prospectus is lodged and we have to wait until the end of exposure period to see what [ASIC’s] response will be. We hope it is viewed favourably and that it will be the start of a new chapter in history for the firm,” he said.
Of the $35 million expected to be raised, $17.3 million will be allocated to the seven vendor shareholders, who will retain a 48.8 per cent stake in the company after the float. Most of that will come from the conversion to normal shares of 14 million foundation shares held by Grech, executive director Peter Gordon and principal lawyer Paul Henderson.
Johnathan Tooth of Austock Corporate Finance, which is managing and underwriting the offer, said mid-sized institutional investors had responded well to the offering, already having committed themselves to $20 million of the offering.
“By and large they were very impressed and it turned out extremely well. There was a bit of scepticism at first but once Andrew (Grech) explained the story and they got to know him they were very positive at the end of it,” he said.
Slater & Gordon, which has 21 branches across five states and the ACT, has already acquired five personal injury firms in the past two years, and intends to use $15.4 million for growth which will include more buy-outs.
Currently non-lawyers are only allowed to own law firms in New South Wales, Victoria and Western Australia, which meant the firm had to come up with special arrangements for its Brisbane and Adelaide offices. Grech will operate as a sole practitioner in those states under a servicing and licensing agreement with Slater & Gordon which has received approval from regulators in those states.
“The arrangements are temporary until the model laws come into effect across Australia,” Grech said.
Integrated Legal Holdings (ILH), had been touted as the first legal services firm likely to go public but its plans to list last year were delayed when the Western Australian Legal Practice Board expressed concerns about the company’s prospectus.
ILH spokesman Brett Davies said ILH still hopes to list before the end of the financial year. Davies acknowledged Slater & Gordon had a very good business model but one that was very different to that of ILH.
“Our model is different to theirs. Theirs seems to be acquiring law firms to tuck into Slater & Gordon but ours is to acquire law firms as stand-alone businesses. Those law firms we acquire will continue to operate under their own masthead and with the same structures. We may then go out to acquire law firms as tuck ins to those existing ILH firms.
“We can buy any law firms in any area of practice but with Slater & Gordon they can really only buy firms that fit into what they want to achieve — we don’t have that restriction,” Davies said.
Competition to buy firms is also likely to come from former Minter Ellison managing partner Phil Clark’s venture DJClark, which has already bought up six firms. DJClark has no immediate plans to list.