Six big firms would make it into the FTSE100 if floated
02 March 2012
A survey has shown that six of the UK's biggest law firms would make the FTSE100 if they became listed companies. Although potential investors shouldn't get too excited, because the chances of any of them floating seem remote.

The results, published by Europa Partners (nope, us neither), purport to show that Allen & Overy, Freshfields and Linklaters would each make it into the top tier of PLCs, followed by Hogan Lovells, Clifford Chance and DLA Piper. Each would be worth over £2 billion.

The survey relied on a variety of assumptions and guesswork. UK limited liability partnerships report revenue, PEP and so on, but don't provide all the data needed to accurately value a business. And when it comes to Slaughter and May, which is both an old fashioned partnership and remarkably coy about its financial results (which it is rumoured to under-report), you might as well stick a damp finger in the air. However Europa reckons that each S&M equity partner (so that's all of them) would get an average £8 million from an IPO. Although whether institutional investors would be allowed into the partners' dining room would probably be a more pressing concern for the partners.

Investors queuing to buy shares in a law firm: how it looks

But if you're looking to pump your money into a law firm, you're going to have to wait. In the exciting new world of the Legal Services Act which allows external investment, they all now have the potential to go ahead and float. But none of the Magic Circle have shown any interest in floating, preferring the traditional partnership model.

Whilst Australian firms have shown a bit more interest in alternative business models than their UK counterparts (Slater & Gordon listed way back in 2007), it's the smaller firms which are be taking the lead in Blighty. It was reported this week that Manchester firm Keoghs is negotiating to get a chunk of private equity cash. And while a float is a possible exit strategy for PE investors, it could be five years or so until the market gets to see a UK firm publicly trading its shares.