A small New South Wales (NSW) firm, Noyce Legal, has become the first legal practice to list part of its business on a stock exchange.
The Australian firm has spun off its mortgage lending business, National Lending Solutions (NLS), and listed it on the Australian Stock Exchange (ASX). NLS will operate as a wholly-owned subsidiary of Infochoice, which has acquired all of the issued share capital of NLS.
The shares started trading on 30 March and had already increased in value, from 25 to 39 Australian cents (10.3p to 16p), as The Lawyer went to press.
“As I understand it, we’re the first business to spin off from a law firm and publicly list,” said Michael Noyce, managing partner of Noyce Legal and now executive director of Infochoice.
In NSW, the Legal Professions Act, which was introduced three years ago, allows firms to become incorporated legal practices, which can then list on an exchange. Other Australian states are now looking to introduce similar legislation.
At the moment, UK firms are unable to list on a stock exchange. But that is set to change, with the Law Society Council approving new rules that will enable non-solicitors to invest in firms.
This may be a particularly viable option for those firms that have large-volume businesses that can then be spun off. Russell Jones & Walker chief executive Neil Kinsella confirmed that listing could be an option that his firm would look at if and when it became available. “This is clearly a market that’s in transition. We definitely need to do something new,” he said.
However, at the moment in seems unlikely that whole firms would list on an exchange. DLA partner and head of transactions Andrew Darwin said: “In the mainstream law firms, all the assets are portable – it’s the partners. What’s in it for investors?”
Indeed, Noyce said he listed NSL rather than all of Noyce Legal as he felt the NSL business was more attractive to investors than a general commercial legal practice would be.