Following Gateley’s landmark listing in 2015 where partners pocketed a combined £25m, some senior partners have taken home almost £500,000 each after a stake in the top 50 UK law firm was sold for nearly £10m in October.
Documents at the London Stock Exchange (LSE) show a sale of 6.21% of the firm’s equity due to a ‘strong demand from new institutional shareholders’.
Key beneficiaries are chief executive Michael Ward, chief operating officer Peter Davies, corporate restructuring partner Brendan McGeever and corporate partner Paul Hayward. The four sold 328,900 shares at £1.50 a share – taking home a total of £493,350 each.
Meanwhile, real estate partner Rod Waldie received £296,010 for 197,340 shares; residential development partner Callum Nuttall received £434,860 for 289,907 shares and corporate partner Nick Smith took home £210,960 for 140,640 shares.
Finance director Neil Smith purchased 20,000 shares for £30,000 and non-executive director Suki Thompson purchased 10,000 shares for £15,000. Both Ward and Davies still own almost 2.5% of Gateley’s total issued share capital.
The share sales demonstrate continued momentum for Gateley, after it became the first major law firm to list on the LSE. Some partners may look on enviously at these six-figure sums, as well as the firm’s top-line which increased by 16% from £67.1m to £77.6m for this financial year. However, according to one national managing partner, it is difficult to compare Gateley to a normal LLP structure.
‘I am a little sceptical on the numbers as it is difficult to do a like-for-like comparison. Service delivery models are crucially important and will become increasingly important. I did see the original prospectus and there was nothing in there that surprised me. Nothing that any other law firm isn’t already talking about – team hires, opening offices, investing in IT.’
On the original £30m share sale, another partner added: ‘A relatively small number of partners benefited. They raised £30m in the first round and £25m went to a certain number of partners. So there was £5m left for all of those things that they talked about in that prospectus. It immediately makes me think: “OK, so this is about selling the crown jewels and looking after a few individuals. Aren’t lock-ins generally because you are worried about the longevity of the business?”’
According to the filing on Gateley’s admission, partners of the firm held 70% of the enlarged capital at that time and voluntarily entered into five-year lock-in agreements that allowed them to dispose of up to 10% of their interest in any 12-month period after the first anniversary of admission.
The prospect for listed law firms had been anticipated for years but, with fellow pioneer Slater and Gordon currently struggling, the profession remains sceptical of the benefits of outside investment.