Analysis: Market forces
Among the mining companies, banks, and the rest of Australian corporate might on Sydney's stock exchange, it is easy to miss. The share price acronym, SGH, hardly gives the game away. But Slater & Gordon Holdings is a world first.In May 2007 the Melbourne-based plaintiffs firm became the first law firm ever to go public. Overnight, the firm's seven senior lawyers - effectively the equity partners, although Slater & Gordon (S&G) ditched its partnership when it incorporated in 2001 - saw their stakes in the business converted into shareholdings worth between A$2.7m (£1.25m) and A$10m (£4.9m) at the A$1 offer price. Three of the most senior lawyers - managing director Andrew Grech, executive director Peter Gordon, and senior personal injury specialist Paul Henderson - made A$4.6m (£2.2m) that day by selling part of their stakes.During the past 20 years S&G has gone from a law firm with an uncertain future to a public company with a market cap of about A$140m (£66m), its share price now hovering around the A$1.30 mark. It has profited from a radical overhaul of the legislative and regulatory framework in the Australian legal market that has enabled firms to form multidisciplinary partnerships with non-lawyers, to incorporate and, starting in 2004, to seek external investment. As such, the firm has been understandably viewed as a bellwether for the revolution set to sweep through the UK under the Legal Services Act, which will usher in full external investment in law firms by 2011. For the 21st century law firm, going public is suddenly an increasingly viable option.
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