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Firm's Listing on Exchange Makes History

An Australian law firm made legal and corporate history today, says a report in The Australian, by becoming the first law firm in the world to list on a stock exchange. The Melbourne personal injury firm Slater & Gordon listed on the Australian stock exchange, with trading opening at 32 cents higher than the firm's issue price of $1 a share. At a news conference, managing director Andrew Grech said the firm has plans to grow substantially, doubling or tripling its client base from its current level of 20,000. The firm, he added, is well prepared to manage potential conflicts of interest between its duties to shareholders and those to clients. "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," The Australian says.

The Melbourne lawyer who writes the blog The Legal Soapbox wonders whether this is a good idea. The public offering raises two intriguing concerns, she notes. The first involves the impact on the firm's reputation:

"Slater & Gordon is a firm which has a reputation for bringing class actions on behalf of 'little guys' against large corporations. Now it will be listed alongside many of those corporations. Somehow that just seems ironic to me."

Her other concern is the tension the listing creates between earning a profit from clients and achieving efficiency for clients. She writes:

"It seems to me that by adding shareholders to the mix, the firm will be pulled in three ways instead of two -- (a) profiting from one’s client, (b) doing the most efficient job possible for one’s client and (c) keeping one’s shareholders happy. And I haven’t even mentioned the lawyer’s duty to the court (which is supposed to be our primary duty)!"

Slater & Gordon's Web site now features pages for investors, where you can find its prospectus, its governance policies, a description of the company and profiles of its board and management. In its IPO last month, the firm raised $15.4 million. Capital the firm raises will go towards acquisitions of other firms and towards marketing and advertising.

Posted by Robert J. Ambrogi on May 21, 2007 at 02:10 PM | Permalink | Comments (2)

Comments

Readers may be interested in an exchange on public ownership of law firms among myself, Bruce MacEwen, and Larry Ribstein, at
http://www.law.georgetown.edu/legalprofession/documents/firmsethicsequity.pdf.

Mitt Regan
Georgetown Law Center

Posted by: Mitt Regan | May 21, 2007 4:52:56 PM

c172t

Posted by: ma944zda | Dec 10, 2007 5:47:14 AM

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