Top 30 U.K. firm Irwin Mitchell has appointed legal and financial advisers as it continues to move toward being one of the first law firms to accept external investment, reports Legal Week. The 520-lawyer practice has retained Norton Rose and Espirito Santo Investment Bank to advise on the potential raising of outside capital under a so-called Alternative Business Structure (ABS), which will be permitted for the first time once the Legal Services Act (LSA) takes effect this October.
"The LSA will create exciting growth opportunities for strong, well-financed legal services businesses to accelerate their growth plans," Irwin Mitchell managing partner John Pickering told Legal Week. "Irwin Mitchell intends to be at the forefront of these changes, and we have therefore taken the decision to seek external investment to further our ambitious plans for the business. Conversion to an ABS will broaden our access to capital and enhance our funding flexibility as we execute our strategic growth plan."
Last September, The Am Law Daily identified Irwin Mitchell as a likely candidate for external investment. In March 2009, it became one of the first to convert to Legal Disciplinary Partnership (LDP) status when such structures became permitted under an earlier stage of the LSA, allowing nonlawyers to hold equity within the firm. The firm has not ruled out the possibility of following Australian personal injury specialist Slater and Gordon, which in May 2007 became the world’s first law firm to float its stock, by listing on the London Stock Exchange.
The move comes as the long wait for the onset of the third and final stage of the LSA draws near. Irwin Mitchell is not alone in preparing itself for a change that many experts believe will fundamentally reshape the profession.
A number of regional firms such as Cambridge-based Mills & Reeve have also made the switch to LDP status, while others, such as fast-growing Shoosmiths, have launched their own consumer legal brands. Last July, former SJ Berwin private equity partner Matthew Hudson launched his own boutique law firm, MJ Hudson, using seed funding from several private equity backers. Hudson, who headed the London offices of both O’Melveny & Myers and Proskauer Rose, told The Am Law Daily that he anticipates the debt will be converted to "minor stakes" when the ABS legislation takes effect next October.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.