Law firm IPOs

And you thought securities law and staid law firms would never meet? In at least one jurisdiction, law firms have done an IPO and listed (Australia) - see how the firm is doing on the Australian Stock Exchange. An interesting article in the Economist (subscr required) concludes about a public listing of law firms:

"Another concern for potential investors is that lawyers are not proven business leaders. Clients frustrated with private-practice lawyers often accuse them of lacking commercial nous. Because most lawyers spend much of their time peering at small print, big-picture concerns can go unnoticed. Few managing partners know their firm’s profit per billable hour, even though that is the main product law firms sell. Cost control is often an afterthought, trailing far behind revenue generation.

Furthermore, lawyers have never had to endure the same pressures as the managers of listed companies, where the shareholders call the shots. In law firms, equity is held by a small number of partners. Outside investors are sure to be less sentimental and more critical when analysing a firm’s performance. For law firms that do decide to go public, success will depend on their managers’ ability to run them as public companies, rather than members-only gentlemen’s clubs."