DWF is poised to become the largest law firm on the London Stock Exchange with an expected market valuation of between £400 million ($517 million) and £600 million ($776 million).
The firm will float at least 25 percent of its issued share capital on the market and expects to raise a minimum of £75 million ($97 million). This will be used to repay a portion of the members’ capital, invest in infrastructure, fund working capital and fund potential future acquisitions, according to the firm’s statement.
Once the firm becomes a public company, partners will be paid on a fixed basis, and will also receive dividend income and performance-related bonuses paid out of an annual bonus pool. The firm has said it will target a dividend payout ratio of up to 70percent of post-tax profit.
Partner capital will be subject to a phased lock-up, which will mean that they will be able to take out a maximum of 20 percent in each of the first five years after the IPO, subject to performance criteria.
The firm is also to make a distinction between ‘good leavers’ and ‘bad leavers’ in the event a partner decides to leave the firm within the five-year lock-up period. A ‘good leaver’ can expect to have their capital released back to them, whereas there is provision to claw back capital from a ‘bad leaver’.
An example of a ‘bad leaver’ is someone who leaves a business as a result of breaching the terms of their employment.
DWF first confirmed its intention to float in June 2018, becoming the sixth firm in the U.K. to do so, but the first to target a main market listing.
The firm said it will include full details of the IPO — including more detail on remuneration, incentivization, and lock-up arrangements — in its flotation prospectus.