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MELBOURNE - Lawyers Slater & Gordon claim to have made legal and corporate history yesterday as the first law firm in the world to list on a stock exchange.
The Melbourne-based firm raised A$35 million ($39.4 million) in an initial share sale after regulatory changes allowed law firms
to have outside shareholders.
Slater & Gordon, which focuses on class-action suits and represented asbestos sufferers against James Hardie Industries, will use the IPO proceeds to help fund its expansion.
The share sale may be the forerunner to other law firms going public.
"Virtually every law firm in Australia is considering listing or at least looking at it," said Brett Davies, spokesman for Integrated Legal Holdings in Perth. "The race will be on because the laws have only just changed."
Integrated Legal, which was formed to buy a number of law firms including Davies' practice, last week filed new documents to sell shares. A planned A$12 million share sale had been delayed several times since October to comply with disclosure demands by the Western Australia Legal Practice Board.
Integrated Legal was likely to list before August 25, Davies said.
Slater & Gordon managing director Andrew Grech revealed the firm already had an appetite to grow bigger.
Grech said mergers and acquisitions were "a substantial area for potential growth".
"We think there is a compelling case for us to be successful in consolidating the personal injuries market to begin with," he said.
Slater and Gordon have already swallowed five smaller practices - worth between A$1 million and A$4 million - over the past two years as they expand interstate from their Victorian base.
Grech said he hoped to double or triple the firm's client base of 20,000 although he did not set a timeframe.
Shares in Slater & Gordon opened at a significant premium when they began trading on the ASX yesterday and closed at A$1.40 compared with their issue price of A$1.
Grech said yesterday's event was "as far as we know ... the first listing of a law firm in the world".
"The firm has a long tradition of being first in lots of areas of litigation," he said.
"Quite often that's involved controversy. It's not a place that you would expect to see backing off from controversy and we won't be in the future."
But Grech said the firm was well-prepared to manage potential conflicts of interest between its duties to the court and to clients on the one hand and now to its shareholders.
The practice has explicitly set out in its constitution that its primary duty is to the court, then to clients, and then to its shareholders.
As well, Slater & Gordon's prospectus warns there could be times the firm will act contrary to the interests of its shareholders and short-term profitability in order to fulfil its duties to the courts and its clients.
"I don't think being able to operate your business sensibly means you have to sacrifice the quality of the professional work you do for your clients and the way you deliver those services to clients," Grech said.
The firm has more than 95 million shares on offer and another 12 million non-voting shares.
Grech and fellow director Peter Gordon hold more than 14 million shares each.
With 21 branches across five states and the ACT, the firm was founded in Victoria in the 1930s mainly to pursue workers compensation cases.
Slater & Gordon is forecasting revenue of A$58.7 million for fiscal 2007 and a net profit after tax of A$9.1 million. Of the capital raised from its IPO, $A15.4 million will go to an acquisition programme and marketing and advertising.
- AAP, BLOOMBERG
