An independent study into the legal services sector has revealed that as many as six of the country's top law firms could be big enough for the Financial Times Stock Exchange index of the 100 largest firms in the UK. This would become possible if the large firms decided to float and offer up shares for sale to the public.
The study, conducted by Europa Partners, an investment advisory firm, has revealed that Allen & Overy would lead the pack as the largest legal services firm in the UK.
Using traditional corporate finance methodology the survey revealed that Allen & Overy would be worth around £2.6bn. This places it ahead of magic-circle rivals Freshfields Bruckhaus Deringer, Linklaters and Clifford Chance.
Meanwhile a flotation at legal services firm Slaughter and May, another member of the magic circle of top law firms, would net its partners a cool £8m each cased on an average shareholding.
The partners at Slaughter's have long been viewed as the best remunerated in the sector. The firm has a salary and benefits structure which allows partners to 'own' a section of the business, and take home a share of annual profits instead of a salary.
The report comes after the implementation of the Legal Services Act 2010, which allows non-law firms to own and run legal services businesses. The market in the UK is valued at £23bn.
At present the management at all the magic-circle law firms have all stated that they are not seeking to float in the near future.
Allen & Overy's managing partner is Wim Dejonghe.
"These valuations show there has been a quiet revolution over the last ten years in the UK legal sector. The leading UK law firms are now big businesses," he said.
"All of this is good for jobs and value creation. However, we still see partnership, rather than flotation, as the best model for our business."
Read more on the story (Financial Times)
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