In my last post, I suggested that it might not be wise (or successful) for a law firm to float. Over the last few days I've had a couple of interesting conversations based on that posting and so feel that I should comment further.
I suggest that the shock from floating to both of those structures will be enormous. Not only would the partners have to get used to other people wanting information and wanting to be involved in decision making, they would have to justify themselves, their actions and their pay to these other owners, who might not even be lawyers... How would it work too? Would each partner be given an equal number of shares? What would be the basis for the initial offer? Would there be an internal market in shares amongst the partners? That might mean, surely, that a junior partner might be able to own a larger proportion of the firm than a more senior partner. It can all get messy very quickly.
The time may come when a mid-sized firm is ready to be floated - but I don't think that time is now. The cultural change would be too great, too disruptive and is likely to lead to many unintended consequences.