donnie
11-10-2006, 11:15 AM
This one looks like a good company to invest in. We all know what legal firms are like. Money,money,money:D[:p];)
Law practice listing to set a precedent
Chris Merritt
October 11, 2006
PARTNERS in three small Perth-based law firms are about to launch the nation's first listed legal practice, in a move aimed at shaking up the national market for legal services.
The three junior firms hope to raise $14 million from the public - most of which will pay for goodwill. Once listed the new vehicle, Integrated Legal Holdings Limited, will have a market capitalisation of $32.5 million.
While ILH has been founded by partners in very small firms, it is expected to target some of the biggest law firms on the east coast.
The company, which is chaired by former federal Labor minister John Dawkins, aims to shake-up the structure of the market for legal services by persuading partners in traditional law firms to sell their equity in return for a fixed salary and profit share.
ILH's founding partners are from the firms Talbot Olivier, Durack Zilko and Brett Davies Lawyers, which will all be folded into ILH.
The company will also include two other divisions: an online business that supplies master documents for law firms; and a management consultancy for professional service firms.
The offer document shows that while the company has net assets of $14.7 million, goodwill accounts for $12.3 million.
Of the $14 million being sought from the public, $10.9 million will be paid to the owners of the three law firms and the other operating divisions, leaving ILH with working capital of $1.4 million. In the financial year to June 30, it had revenue of $10.3 million and earnings before interest, tax, depreciation and amortisation of $4 million.
The company's managing director will be Thomas Henn, who trained in Germany before practising with one of the big four accounting firms here and several Australian law firms.
One of ILH's founders, Brett Davies, said that the move had been made possible by changes that allow legal practices to incorporate and - in some states - to be owned by non-lawyers. "At the moment, we have the first-mover advantage but I am sure others will follow very quickly," Mr Davies said. "This is a new world."
He said law firms were highly profitable and there was no reason why small investors should not be allowed to participate in a market that had previously been restricted to lawyers.
The offer document shows that the founding partners of ILH have signed employment contracts with the company that gives them a salary and 20 per cent of all new profits generated by their firms. Mr Davies said the same structure would be applied to other law firms that are eventually acquired by ILH.
All the founding law firms will continue to operate under their own names, but will receive management and other support from ILH.
Mr Davies said he expected the new corporate structure to be extremely attractive to partners who were seeking a deeper market for their equity, and to employed solicitors. "The problem with law firms is that the partnership structure is antiquated," Mr Davies said.
He said young lawyers were no longer interested in devoting their lives to one firm in the hope of becoming partners.
"In fact, they see them as a life sentence," he said.
"You buy in and you have bought yourself a job and not much more.
"The carrot of partnership is not as attractive as it used to be."
The offer opens on October 17 and is due to close on November 27.
Law practice listing to set a precedent
Chris Merritt
October 11, 2006
PARTNERS in three small Perth-based law firms are about to launch the nation's first listed legal practice, in a move aimed at shaking up the national market for legal services.
The three junior firms hope to raise $14 million from the public - most of which will pay for goodwill. Once listed the new vehicle, Integrated Legal Holdings Limited, will have a market capitalisation of $32.5 million.
While ILH has been founded by partners in very small firms, it is expected to target some of the biggest law firms on the east coast.
The company, which is chaired by former federal Labor minister John Dawkins, aims to shake-up the structure of the market for legal services by persuading partners in traditional law firms to sell their equity in return for a fixed salary and profit share.
ILH's founding partners are from the firms Talbot Olivier, Durack Zilko and Brett Davies Lawyers, which will all be folded into ILH.
The company will also include two other divisions: an online business that supplies master documents for law firms; and a management consultancy for professional service firms.
The offer document shows that while the company has net assets of $14.7 million, goodwill accounts for $12.3 million.
Of the $14 million being sought from the public, $10.9 million will be paid to the owners of the three law firms and the other operating divisions, leaving ILH with working capital of $1.4 million. In the financial year to June 30, it had revenue of $10.3 million and earnings before interest, tax, depreciation and amortisation of $4 million.
The company's managing director will be Thomas Henn, who trained in Germany before practising with one of the big four accounting firms here and several Australian law firms.
One of ILH's founders, Brett Davies, said that the move had been made possible by changes that allow legal practices to incorporate and - in some states - to be owned by non-lawyers. "At the moment, we have the first-mover advantage but I am sure others will follow very quickly," Mr Davies said. "This is a new world."
He said law firms were highly profitable and there was no reason why small investors should not be allowed to participate in a market that had previously been restricted to lawyers.
The offer document shows that the founding partners of ILH have signed employment contracts with the company that gives them a salary and 20 per cent of all new profits generated by their firms. Mr Davies said the same structure would be applied to other law firms that are eventually acquired by ILH.
All the founding law firms will continue to operate under their own names, but will receive management and other support from ILH.
Mr Davies said he expected the new corporate structure to be extremely attractive to partners who were seeking a deeper market for their equity, and to employed solicitors. "The problem with law firms is that the partnership structure is antiquated," Mr Davies said.
He said young lawyers were no longer interested in devoting their lives to one firm in the hope of becoming partners.
"In fact, they see them as a life sentence," he said.
"You buy in and you have bought yourself a job and not much more.
"The carrot of partnership is not as attractive as it used to be."
The offer opens on October 17 and is due to close on November 27.