As much as the traditional partnership model has been disrupted in the last few years, no firm has gone as far as Gateley did yesterday (12 May) by filing its intention to float with the London Stock Exchange.

The filing contains detail on exactly how much of the firm will go to external investors – 49.9% – and how much will be kept in the hands of equity partners – 50.1% – who face a five-year lock-in, during which time some or all of their shares can be taken away if they leave.

Valuing a UK law firm for a listing has no precedent. To this end, broker Cantor Fitzgerald, advised by a Fieldfisher team headed by corporate partner Neil Matthews, attempted to construct a like-for-like peer group as best it could, drawing on professional services firms of a similar size offering some similar services to overlapping clients.

Comparisons with law firms listed elsewhere, including Australia's Slater & Gordon, were also relevant in the valuation but to a lesser extent.

In the end, they came out with a figure in the region of £130m.

The motivation for raising the cash, according to Gateley senior partner Michael Ward, is to fund an expansion drive that could include taking over entire law firms, niche practices, side-line businesses or luring in team hires.

The firm has no specific acquisition targets in mind at this stage, however.

"It will be services close to what we currently provide; for example, a human resources consultancy would sit well with our employment team," explains Ward. "We can look a little further left or right than our existing business model but it would have to stay relevant; we aren't suddenly going to go into accountancy."

We can look a little further left or right than our existing business model but it would have to stay relevant; we aren't suddenly going to go into accountancy

Ward is currently on an investor roadshow to drum up support for his growth mission. He has seen around 30 potential candidates so far, with another 30 in the pipeline. He will not be drawn on names, but is optimistic when it comes to institutional take-up.

"I have been an investor in Gateley for more than 20 years, and it's not let me down yet. I hope like-minded investors will do the same."

But will the sudden appearance of external, institutional investors stop partners retaining real influence over the firm?

"Hopefully not," says Ward. "What we are going to try and do is to run the business as near as possible post-float to the way we ran pre-float. All of the reasons our guys come to work in the morning and deliver quality legal services – we made sure that's all still in our business."

Equity partners will not be able to invest more than their initial allocation of shares, he adds, which will mirror their current share of the equity from day one.

"In terms of moving to salaries as opposed to a share of profits we have addressed that in a way we think works," says Ward. "People are going to get a salary, a bonus and an investment return."

HBJ Gateley, the firm's Scottish trading arm, will not be involved in the float, given that the Scottish rules still prevent law firms from taking up the alternative business structure licences that would allow them to take on external investment.

But, if all goes to plan, the rest of Gateley hopes to complete its listing by the end of the month, with 28 May pencilled in as the launch date. An exact valuation will come in the firm's admission document, which will indicate investor appetite and pricing ahead of the float.

Under stock exchange rules Ward is prevented from disclosing any projections of the firm's revenue or profit to Legal Week. He will also not comment on many of the technical and advisory aspects of executing the float, but for a completely different reason. He is keen to pick up instructions from other law firms should they choose to follow suit and file for an initial public offering.

"We are always open for business and looking for new lines of work," he says. Ward draws an analogy with the firm's mandate on Halliwells' insolvency, the first large UK law firm to go under, which led to several further law firm insolvency mandates for Gateley.

Ward admits that there have been some disappointments along the way to announcing the firm's planned listing on London's AIM exchange, and that deciding to launch a public offering was "not a cheap process". He declines to give specific figures but brokers usually charge up to 5% of the money raised through a float as a fee and fixed costs are around £50,000 on top of that. 

"The devil is in the detail," sighs Ward, who can finally see the end of a long road towards the listing. Only one detail will matter to investors in a publicly traded Gateley though: whether the firm can grow fast enough to pay back its shareholders.