An Australian law firm went public and was listed on the Austrailan Stock Exchange on May 21, 2007. Australia adopted legislation that permits non-lawyers to invest in the ownership of a law firm, and capital to be raised publicly. The 140-lawyer firm, Slater & Gordon, will initially have shares owned by 42 lawyers and staff, according to The American Lawyer. Legislation has also been introduced in the U.K. to permit law firm IPOs.
If the UK permits law firms to go public,it will probably be the beginning of a wholesale shift in the lawbiz. There will be many detractors and much resistance in the U.S., but moving mega-firms away from the partnership structure to a real corporate structure may have significant benefits. As true business managers and marketing experts have the opportunity to share in the profits of a law firm, the great class chasm between lawyers and non-lawyers may finally disappear. Innovation may become more valued in firms. The billable hour may fall away to value-billing or other creative structures. Firms may develop more balanced methods of valuing the contributions of its employees. Hey! Perhaps even teamwork could become popular.
I confess that I am having some difficulty imagining how a public law firm would work in the near term. I can imagine the possibility of a serious decline in the professionalism of law practice. Even commoditization of many legal services. We are already headed that way, however, and I’m not sure that the public opinion of lawyers can sink much lower.
One result may be that many lawyers will make less money, with most becoming part of the working middle class, instead of the professional elite, and a few becoming ultra-wealthy titans. One could say we are seeing that trend already, however. As firms go public, they will probably stratify more, with legions of paralegals and other non-lawyers. As bright line distinctions blur, there certainly won’t be the defacto up or out policies that still exist today in many large firms. Just smaller stock option packages, or lawyers who don’t receive stock options.
Whew! It boggles the mind to think what the future may hold for law firms and lawyers.