THE AUSTRALIAN Stock Exchange has for the first time seen the listing of a business ‘spin-off’ from a law firm. Noyce Legal last week announced the successful listing of its mortgage and documentation processing business, which will operate as a wholly owned subsidiary of InfoChoice, an online ‘infomediary’ for financial and investment services.
Noting the listing represented a first for the Australian legal profession, managing partner of Noyce Legal and now executive director of InfoChoice, Michael Noyce told Lawyers Weekly that “law is a business [and] that is what we have been building — a differentiated business”.
At an Extraordinary General Meeting last week, InfoChoice shareholders approved the acquisition of all of the issued capital of Noyce Legal’s mortgage and documentation processing business, National Lending Solutions (NLS). Settlement of the sale was expected on 19 March and trading in the shares of the merged entity will resume on the ASX on 30 March.
“Use of an incorporated legal practice has allowed us to corporatise and commercialise our firm’s intellectual property and systems, with the sale allowing the business to grow more rapidly thanks to easier access to capital and the ability of our parent company to issue scrip for acquisitions,” Noyce said.
Pressed on the nature of the relationship between the publicly listed company and the rest of the incorporated legal practice, Noyce insisted it was a “win-win situation” for shareholders and clients.
He dismissed suggestions that there could be conflicts between corporations law and the NSW Legal Profession Act 1987. As well, he felt there was no need for measures to resolve any conflicts between duties to shareholders and the incorporated legal practice’s duty to the legal profession.
“We will have no problems balancing [the company and the subsidiary],” Noyce said.
There would be no connection between the remaining Noyce Legal practice and the business, he added. “Noyce is rolling out the mortgage and documentation processing business, which is now NSL, and this will be a subsidiary of InfoChoice with no connection to the Noyce firm.”
As an incorporated legal practice, NLS can continue to offer its clients professional indemnity insurance and transaction certification. NLS will now “drive the business for the shareholders” and “maintain the high ethical standards that we have”, Noyce said.
He said the transaction also brought benefits for the remainder of the firm. The sale will enable it to continue the firm’s focus on the provision of services in the areas of general litigation and commercial disputes, debt recovery, insolvency and liquidation, property, family law and wills and estates.
“The transaction brings many benefits for Noyce Legal and will enable us to return to the grassroots provision of traditional legal services, while maintaining a commitment to commercial innovation and best practice,” Noyce said.