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Floating Law Firms

Floating Law Firms - UK Financiers Prepare To Float Law Firms

www.LawFuel.co.nz -

The Law Jobs and News Wire The changing face of the law profession, starting with the flotation of Australia’s Slater and Walker law firm, is likely to continue with a major UK financier targeting the legal profession ahead of deregulation.

Despite the impending onset of the Lawyers and Conveyancers Act in New Zealand, there is no current prospect of New Zealand law firms being able to solicit investment funds, notwithstanding their new ability under the LCA to incorporate. Some commentators believe the ability to obtain investment funds for law firms, the largest of which now have an annual turnover of in excess of $100 million, to be a matter of time.

In the United Kingdom, Lyceum Capital, known as a buy-out house and flush with its latest £255m fund , has appointed a high profile advisory panel comprising legal consultants and experts, including former Clifford Chance managing partner Tony Williams.

The venture, revealed today by legal newspaper Legal Week, is being overseen by Lyceum’s managing partner, Jeremy Hand, the incoming chairman of the BVCA — private equity’s main industry body in the UK.

Lyceum is to target opportunities from the Legal Services Act (LSA) by investing in mid-tier firms to help fund their growth, including taking minority and full controlling stakes. The LSA will create the most liberal legal landscape in the world.

With the help of the panel, Lyceum, which has just announced its latest, will look for potential investment targets and give business advice in addition to funding.

Hand told Legal Week: “Law firms are businesses. We are not pretending we are lawyers but we can help businesses develop — whether through giving advice, overhauling IT systems or allowing them to grow with new hires.”

The buy-out house is already talking to a number of firms with a view to getting structures in place before the LSA comes into full force in 2011. It is currently targeting mid-market firms and those doing bulk work.

Hand is not limiting the size of investment, with options including a significant investment in a sizeable legal practice in return for a small stake or a large investment in a smaller firm in return for a controlling share.

Williams, the former head of Andersen Legal and founder of Jomati Consultants, said they expected to target firms in the £20m-plus revenue bracket which are looking to expand.

He commented: “Corporate firms in a busy market will not think about this but in a quieter market, when panel processes are getting more rigorous and money is tighter, it suddenly becomes more interesting — firms start to concentrate. This has come at the right time.”

Lyceum expects outside investment will be particularly attractive for firms seeking funds to carry out a merger or to develop a new practice area. Hand also sees opportunities for consolidation in firms’ bulk work by putting in place funding for new IT systems.

“People think they are in a competitive industry but they do not appreciate how different it is in other sectors. This will change the entire business landscape. There is no doubt in my mind there will be winners and losers in this situation: firms cannot be complacent. There is no guaranteeing firms at the top of their game now will be there in a few years’ time.”


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