World’s first law firm to be listed

History was made as the Australian firm Slater & Gordon, became the first Australian firm to liston a stock exchange:“Melbourne lawyers Slater and Gordon made legal and corporate history today as the first law firm in the world to list on a stock exchange.
As the personal injury specialists listed on the Australian stock exchange, managing director Andrew Grech revealed the firm already had an appetite to grow bigger.

Mr Grech told reporters in Melbourne that mergers and acquisitions were “a substantial area for potential growth”.

“We think there is a compelling case for us to be successful in consolidating the personal injuries market to begin with,” he said.

Slater and Gordon have already swallowed five smaller practices – worth between $1 million and $4 million – over the last two years as they expand interstate from their Victorian base.

Mr Grech said he hoped to double or triple the firm’s current client base of 20,000 although he did not set a timeframe.

Shares in Slater & Gordon opened at a significant premium when they began trading today at $1.32 compared to their issue price of $1 a share.”

The issue that jumped out at me is that with the conversion of a legal practice into a full-fledged business, with obligations to ensure profitability to its shareholders, would this not then affect the lawyers’ overriding duty to the Court (to constantly act as an officer of the Court) as well as the lawyers’ duty to their clients?

Andrew Grech, the firm’s managing director, had this to answer:

“But Mr Grech said the firm was well-prepared to manage potential conflicts of interest between its duties to the court and to clients on the one hand and now to its shareholders.

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.

As well, Slater and Gordon’s prospectus warns there could be times the firm will act contrary to the interests of its shareholders and short-term profitability in order to fulfill its duties to the courts and its clients.

“I don’t think being able to operate your business sensibly means you have to sacrifice the quality of the professional work you do for your clients and the way you deliver those service to clients,” Mr Grech said.”

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