High profile Mischon de Reya has approved its high-value public float plans
Mischcon de Reya is one of the highest profile law firms in Britain and it’s impending float will also make it the richest law firm float anywhere.
The law firm has considered a public float for the past two years or more, as we have reported here, and as we also reported, it comes at a time when listed legal service companies are enjoying a post-COVID ‘bounce’ that is setting high values on them and the sector generally.
Eighty three year old Mischon de Reya has now succeeded in a partner vote to take the firm public, appointing bankers JP Morgan to look at listing as early as the fourth quarter and potentially valuing the firm at around £750m according to a report in the Financial Times.
The firm, which famously represented Princess Diana during her divorce proceedings in 1996, as well as representing a range of other high profile clients in equally high profile proceedings, and has a reputation for its aggressive representation of clients in litigation, as well as having large property and employment practices.
The firm said that it wanted funds to accelerate its expansion overseas and to invest in growth opportunities in the technology sector, as well as to recruit more lawyers around its hubs in the UK and Asia, where it has offices in Singapore that opened last year, according to reports.
All employees will receive shares in the listed entity, with the intent of building loyalty among the younger staff who would not normally receive a stake in the firm.
The scheme will also include a salary sacrifice system for partners who take shares, and the firm will set up a super bonus pool over and above its existing one, comprising 5 per cent of Mishcon shares placed in a trust.
Mishcon said that it expected revenues of about £188m for the 12 months to April 9 2021 and had had revenue growth of more than 40 per cent over the past five years.
The current plan is float about 28 per cent of the company, leaving the majority of the firm in the hands of its 178 partners and around 1000 employees.
The company has 178 partners, whose top echelon pocketed more than £1m each last year on average. It employs 1,000 people in offices in London and Singapore — a base it launched in 2020. It has closed its New York office, which it said was ‘inconsistent’ with its growth plans.
Kevin Gold, executive chair at Mishcon, said that the listing decision had been driven by the need to “move the dial” on its growth, which would require a “huge amount more capital”.
Law firms generally run with thin cash buffers and low levels of borrowing — unlike companies, they must ask partners to stump up cash for new investments. A listing would also allow the firm to “enfranchise” its staff — a “John Lewis” model, according to Gold.
Mishcon will become one of a growing number of law firms to list on the public markets amid pressure to boost investment in technology and global expansion.
Rival firm Irwin Mitchell is also considering a flotation this year. Other listed law firms include Manchester-based DWF, which has a market value of about £275m, Keystone Law, valued at £210m, and Knights Group, which is worth about £350m.
RBG Holdings, which owns Rosenblatt, floated in 2018 on Aim and is valued at about £110m. Its share price has more than doubled this year.
Mishcon’s listing comes as the firm comes under pressure to expand internationally, including into Asia and the Middle East and invest in technology and acquisitions.
In the past five years, the firm has increased revenues from £130m to £188m and it has also developed a series of non-law consultancy businesses such as MDR Mayfair — a private family office service — and MDR Brand Management. The firm is also seeking to establish an e-sports gaming agency, according to the FT.