The world's first publicly traded law firm, Australia's Slater & Gordon, has been a poster child for outside investment in law practices. In the five years after its May 2007 initial public offering, Slater's stock price more than tripled in value, and its share issuances funded a dramatic U.K. expansion through increasingly ambitious acquisitions.

Now Slater is seeing the other side of being a public company. Its share price fell by half after news broke in late June that U.K. regulators were investigating its most recent acquisition target, and the firm also admitted to accounting errors of its own. It faces short-selling and harsh public criticism from investors.

On June 24 British insurance claims processor Quindell Plc., which sold its Professional Services Division to Slater in March for $947 million, announced that the U.K.'s Financial Conduct Authority was looking into its accounting practices from 2013 and 2014. Five days later, Slater said that in responding to inquiries from the Australian Securities and Investment Commission it discovered errors in its reported historical U.K. cash flows between 2012 and 2014.