Elena Donio, Axiom CEO (Courtesy photo).

If Axiom Global Inc. completes its plan to become a publicly traded company, it would mean one thing for certain: The legal staffing company's longtime investors will finally get a payout. Beyond that, industry experts said competition among alternative legal services providers would remain largely unchanged by adding a publicly traded peer.

With Axiom declining to comment other than confirming its long-awaited IPO plans, legal industry watchers were left to speculate about what the company's decision to split into three businesses said about the market for those individual services: legal staffing, contract management and enterprise managed services.

The staffing business is what the company hopes to list publicly—in a deal that would likely provide an exit for investors who have been with Axiom since as early as 2005, as well as capital to pursue faster-paced growth.

The longer-term status of the other two businesses, contract management platform Knowable and managed services platform Axiom Managed Solutions, remains unknown, but sources said they appeared ripe for private investments.

The explanation for the split may also be prove straightforward: Wall Street investors are likely to be more receptive to a single, simple-to-explain business—providing contract lawyers for corporate America—than to a conglomerate whose growth relies on lawyers changing their purchasing habits, industry watchers said.

“The Street likes easy-to-understand, easy-to-model businesses,” said Kenneth Grady, an adjunct professor and research fellow at Michigan State University College of Law and former CEO of SeyfarthLean Consulting. “So if you are the current owners [of Axiom], splitting up means you have a pure-play: the Axiom staffing business.”

That business is what Axiom is best known for in the legal market, and the company now has more than 2,000 employees and made $300 million in revenue last year. The company has been led by CEO Elena Donio since 2016.

Axiom “has done a good job of building a brand that signals specialized, well-credentialed, well-vetted talent,” said Bill Henderson, professor of law at Indiana University Maurer School of Law. “Reliably finding the right people with very low variability in quality is a very good operating business.”

Axiom was a pioneer of that staffing model in the legal industry. The company received its first outside funding round in 2000, raising $5.4 million, and made its first annual profit in 2003. That year, it earned $300,000 in profits on revenue of $4.4 million, according to a Forbes article.

The company has had three funding rounds since that initial venture capital jolt. In 2005, Axiom received $7 million in capital from Benchmark Capital and JPMorgan Partners. By spring 2008, the company had 200 lawyers and $55 million in revenue. At the time, the company received an $8 million equity capital investment in a deal that a Harvard Law School case study valued the company at $200 million. And in 2013, a series D funding round brought in $28 million, according to Crunchbase.

The company's fundraising success is one reason Liam Brown, chairman of Axiom competitor Elevate Services, said a potential IPO would not “massively change very much” in the market.

“Axiom were always well funded, and they were the leader in the [legal staffing] space,” Brown said. “And with this capital, exiting investors will get their money. They will continue to have some money to grow their [staffing] business, but they will not be in the managed services or technology space.”

Brown said some competitors—himself included—would “breathe a bit of a sigh of relief” that Axiom's management, after an IPO, will be focused more strictly on the legal staffing business rather than providing a more well-rounded offering to legal departments. But that may have been a decision Axiom had to make in order to go public, something its investors have been contemplating since at least 2012.

That's when Axiom investor Mike Jung said in a Harvard Law School case study, “The story that we can tell to the public markets is real.”

Still, in the same publication, Mark Harris, the company's founder and executive chairman, acknowledged there are drawbacks to being a public company, including “constant” earnings pressure and cultural change.

“We are mindful of the fact that a public offering, even if it comes about, would be simply a mile marker, not an endpoint,” Harris said in the case study.