UK law firm Irwin Mitchell announced this week that it plans to use the £50m "war chest" it expects to gain in converting to an alternative business structure to go head-to-head with mid-tier corporate firms.
The firm is the first firm to declare its alternative business structure (ABS) intentions once the Legal Services Act is implemented in October this year.
The firm has taken financial advice from investment bank Espirito Santo as it prepares to milk the corporate cash cow. It could have done that either through flotation or external investment, and it now reveals it has chosen the former.
Managing partner John Pickering said conversion to an ABS will broaden the firm's access to capital and enhance its funding flexibility.
The firm is preparing for the conversion via a restructure into a two-tier business. It will continue to operate as a limited liability partnership (LLP), while a new holding company will become the controlling member of the LLP.
Under the LSA, firms will be able to establish parent companies that will allow them to operate an umbrella structure, enabling separate business streams to be managed individually.
Pickering said this week that the firm would target growth through mergers and acquisitions once the LSA is put in place.
"We're trying to get a more balanced portfolio that's deliberately diverse," he said, Uk publication The Lawyer reported. "What we do, we do well."
He said the firm is not trying to take on the magic circle, "but in terms of business we can challenge the mid-tier corporate firms and those in small and medium-sized enterprise circles.
"We're doing work for some of the biggest companies around. This will give us the opportunity to grow our service portfolio for the company we're working for."