Recent months have seen the professional services market return to well-worn and somewhat treacherous territory – the stock market listing.
The motivations that drive well-functioning partnerships to rip up the model and go public are pretty well known in most cases. A stock market listing is more often than not about capital – whether that is the capital required to fund ambitious expansion through acquisition, capital to form a shared windfall for a firm’s Partners, or something in between.
All the same, it is undoubtedly a risky move. History is littered with examples of professional services firms that have enjoyed rapid growth post-listing, only to fall by the wayside later. RSM Tenon, ILH Group, Stockford, Crowe Horwath (in Australia) and Vantis have all either gone into administration or re-privatised after an extended run of poor results post listing.
That said, more recently, a number of firms have seemingly made a success of listed status – Shine Lawyers, Slater and Gordon and H&R Block have all achieved successful listings.
Slater and Gordon, for example, has seen its share price more than triple since it went public in 2007 (despite a recent hiccup), and has recently announced an agreement to acquire the A$1.2 billion Quindell PLC’s Professional Services division. How many traditional law firms could make such a bold play?
The question for those seeking to follow suit – Spruson and Ferguson in Australia and Gateley in the UK, for example – is simple: What can we learn from these recent successes?
Does success boil down to strong leadership and sound strategy, or is there something more to it?
Our latest whitepaper, Stocks & Services: Can listed professional services firms find long term success? explores these questions and more.
It looks at the issues that shape post-listing business success and failure – from complexity and lack of integration to loss of key staff. And it identifies a fundamental trait shared by many of the professional services firms recently enjoying successful stock market listings, which raises questions as to whether firms lacking these traits can ever list successfully.
To find out more, download the whitepaper.