Expect the new batch of floating law firms to sink

Law firms are listing on the stockmarket. That makes sense for them, but investors should steer clear, says Matthew Lynn.

Robotic hand filling in a form © iStockphotos

The robots are coming for the lawyers
(Image credit: Robotic hand filling in a form © iStockphotos)

Tech start-ups that have cracked artificial intelligence. Engineers who can make household robots. Internet-based banks or smartphone app developers. There are all sorts of high-growth, emerging industries that you might expect to fuel the next boom in listings on the London market. As it turns out, however, the market is seeing the most action in a business that has been around for hundreds of years, and doesn't seem to have changed very much over that time. Law firms. There have already been a handful of floats on the stockmarket, and this week we learned that Mishcon de Reya is lining up what would be the biggest and most prestigious legal initial public offering (IPO) yet. The firm could be worth hundreds of millions. It is easy to see why that is a good deal for the partners. The problem is that it isn't likely to be a very good deal for investors.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.