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Gateley becomes first law firm to join UK stock market

Luke Graham, special to CNBC

U.K. law firm Gateley is poised to be the first British legal practice to list its shares in London after it announced plans on Tuesday for a flotation that would value the company at £130 million-£140 million ($203.45 million-$219.16 million).

The company will be listed on the Alternative Investment Market (AIM) which supports smaller companies wishing to sell equity.

Michael Ward, CEO of Gateley, the UK's first listed law firm
Ben Phillips | Gateley

Changes to U.K. laws in 2011 permitted law firms to accept investment from people outside the legal industry for the first time. Firms that did so were called Alternate Business Structures (ABSs). Gateley became an ABS in 2014 and is now the first firm to launch an initial public offering.

Gateley, which provides legal services across the U.K. and has an office in Dubai, states its revenue grew annually over the past 10 years by 14.3 percent to £54.6 million ($85.45 million) and operating profit by 14.8 percent to £7.4 million in 2014. The company, which was established in the 19th Century, has a 380-strong team of lawyers and serves more than 4,000 corporate and 1,500 private clients.

Nick Smith, Gateley's acquisitions director, told CNBC that the flotation was the "natural next step" for the business. He said: "We've delivered continuous growth in a difficult environment and we've managed to secure the commitment of a fantastic team of people.

"Accessing the public markets will enable us to continue to innovate and develop more relevant, valuable services. But also at the same time secure and retain the best talent within the industry by employee share holder participation which is not available within the confines of a traditional partnership model."

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CEO Mike Ward also told CNBC that becoming a public limited company would not negatively affect how the company is run: "We want to run the business in the post IPO world as near as possible to how its run now. We understand and accept that there are corporate governance issues which we will comply with and that won't be a problem.

"In terms of restrictions from running our business how we run it now we can't see there are any there."

Mr Smith also explained what challenges commercial law firms faced in the economy. He said: "We have seen a number of changes in the last 10 years or so internationally and nationally and we think the market is subdividing itself into clear groups.

"You need to be clear about which market you're facing, you need to build a financial model that meets the requirements of that market and for us its product development, its maintaining the highest standards of service delivery and retaining the best talent.

"It's an oversupplied market: if you stand still, you go backwards."

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