Irwin Mitchell today became the first major law firm to announce its intention to seek external investment.
The Sheffield-headquartered national practice has appointed Espirito Santo Investment Bank as its financial adviser to review the options for raising external capital.
Though The Times today suggested that it was heading for a stock exchange listing, the firm has emphasised that all alternatives are under consideration and the preferred method and timetable for seeking external funding have yet to be finalised. At this stage the firm is also not being specific about how it will use the money to further its growth strategy.
Irwin Mitchell will have to become an alternative business structure (ABS) anyway because it is currently a legal disciplinary practice with non-lawyer partners, but it will hope that announcing its push for external capital will give it first-mover advantage.
In preparation for becoming an ABS, the firm is to restructure its operations, with the adoption of a two-tier structure which will see the creation of a new corporate vehicle. Irwin Mitchell LLP will remain the main operating business, with the new holding company becoming admitted with a view to its becoming the controlling member of Irwin Mitchell LLP.
Managing partner John Pickering said: “The Legal Services Act will create exciting growth opportunities for strong, well-financed legal services businesses to accelerate their growth plans. Irwin Mitchell intends to be at the forefront of these changes and we have therefore taken the decision to seek external investment to further our ambitious plans for the business.
“Conversion to an ABS will broaden our access to capital and enhance our funding flexibility as we execute our strategic growth plan, while ensuring that we can continue to provide the very highest standards of service to our clients.”
Irwin Mitchell has long been seen as one of the firms most likely to take advantage of ABSs. Best known for its personal injury and volume work, it has been rapidly growing its business services side, hiring senior partners from the likes of SJ Berwin, DLA Piper, Pinsent Masons and Eversheds.
There has been a longstanding rumour of interest from insurers in buying out Irwin Mitchell’s volume personal injury business once they were allowed to, but this announcement would appear to reduce any prospect of that. The firm has always strenuously rejected any suggestion that it would be interested in such a move anyway.