Exclusive: Consumer law consolidator eyes public listing

Goldhill: Freeing up opportunities

Metamorph Law, which has bought eight law firms in the past three years, is planning to list on the stock market in 12-18 months – the first move of its kind for a UK consumer law firm.

Simon Goldhill, founder and chief executive of Metamorph, told yesterday’s Legal Futures Innovation Conference that one of the benefits of listing would be a “war chest” for future acquisitions.

Metamorph Law operates as a single business with multiple local and national brands.

Mr Goldhill said the alternative business structure, launched in 2016, agreed heads of terms for a ninth acquisition last month – and third this year – and currently has a turnover of £27m, with around 450 staff.

Mr Goldhill, a former personal injury solicitor, said Metamorph planned to increase revenue to over £40m by end of 2020, “with an objective of building further to £60m plus” in the near term.

The firm would have “multi-office, nationwide coverage”, providing core consumer and SME services, but with “little” personal injury work.

Local brands would be retained, but Mr Goldhill raised the prospect of developing an overriding – “and the UK’s first” – consumer brand.

“Our aim is to come to market in the next year to 18 months,” he said.

On the benefits of an IPO, Mr Goldhill said: “The objective of the original investors, to get a decent return on capital, is only going to be achieved if the people buying in when we come to the market can see there is a good, long-term future for the business.”

Mr Goldhill said one aspect of this was the ability of everyone in the law firm to own shares.

“I think this has already been seen in the market. There are a few examples of not just senior managers having a chance to share in the equity, but also everybody throughout the business.

“One of the issues for the partnership model at the moment is that you’re not getting the stream of people you had 20 or 30 years ago, seeing partnership as the way forward for them. It’s not attractive for a number of different reasons.

“Switching to a different model frees up opportunities for, in particular, the bright, young stars of today so they have a future.”

Mr Goldhill said Metamorph did not need “an enormous amount of capital for our model to work”, but listing would enable to invest more “in the quality and strength of our central services”.

He added: “A war chest is a great thing to have.”

Metamorph targets firms for acquisition with two to six partners, between 30 and 80 staff, and revenues of between £2m to £5m.

He said they must be “good firms with good local reputations” and no more than the “usual level” of debt.

“The reason we buy is that we can’t do what we want to do unless we have control and can focus on creating capital value. We’re looking to create capital value and to realise capital value.

“Once we acquire, we invest in them. We are able, because of our size and scale, to invest in the support services, in IT and finance, HR and compliance.

“We look to standardise working practices and we are working on culture. Culture is an important element of what we are trying to create – a single business, with lots of local brands. The focus is on driving value for our shareholders.”

Mr Goldhill added that an IPO would be “the start of the journey” and “hopefully Metamporph will continue for many years into the future.”

In August, Metamorph bought Buckinghamshire practice Parrott & Coales, having acquired Hampshire firm Verisona Law in March.

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