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Share dealing begins in stock market-listed law firm

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Knights to recruit 200 more fee earners but remains silent on possible training contract increases

The admission to the stock market of a regional top 100 law firm came into effect this morning.

Knights, whose flotation on the AIM submarket of the London Stock Exchange follows hot on the heels of Gordon Dadds and Keystone Law doing the same thing, has raised £50 million from the initial public offering (IPO) it announced at the start of June. It begins the day valued at £103.5 million.

The firm, which has offices in regional locations across England, has stated in its listing documents that it intends to use some of the proceeds of the IPO to recruit 200 more fee earners, on top of its existing 350. But a hefty £20 million will go to the four selling shareholders: Joanne and Mark Beech (the wife and brother of Knights boss David Beech), Knights partner Karl Bamford, and non-executive chairman Bal Johal, the managing partnetr of private equity firm MML Capital Partners.

Knights remains 45.5% owned by David Beech, with 48.2% of shares in the free market and a further small portion held by other management. In this form, it has pledged to complete at least three acquisitions by April 2020. But there is no indication that the full-service firm is preparing to up its rookie lawyer numbers. According to LawCareers.Net, Knights has six trainees currently, but on its stock market admission document the firm states that it has “approximately 43 trainees”. Knights has not responded to Legal Cheek‘s request to clarify this or issued a comment about future trainee plans.

The acquisitive firm has seen incredible levels of growth under the stewardship of Beech, and particularly since James Caan of Dragon’s Den fame became involved in the firm through his private equity company, Hamilton Bradshaw, in 2012.

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Since then, Knights has seen its revenue grow from £8 million in 2012 to £35 million in 2017. Its listing value of £103.5 million beats Gateleys’ £100 million, the first English firm to float in 2015. Only this month, Knights has increased from six to seven offices with a recent acquisition of Turner Parkinson, a Manchester-based firm, Knights thus gaining 63 additional staff overnight.

Knights is positioned as a modern, corporate-style law firm, having been an early convert to the alternative business structure; partners are not ‘partners’ in the firm but employees, and management is carried out by non-lawyers.

It has also significantly rationalised its non-fee earning staff, distancing itself from more traditional firms where: “in the opinion of the Directors, with partners or senior fee earners feeling morally obliged or comforted by having a long-term personal assistant dedicated to them and their files.” Knights says that now fee earners will take “greater ownership over their work.”

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