The study, reported in the Financial Times, concluded that London-based firms Allen & Overy, Linklaters and Clifford Chance -- as well as Anglo-German firm
Freshfields Bruckhaus Deringer, and Anglo-US practices DLA Piper and Hogan Lovells -- all have valuations large enough to guarantee inclusion into the blue-chip index.

A&O leads

A&O would lead the pack with a valuation of £2.6 billion, according to the traditional methodology applied by investment advisory firm Europe Partners. Meanwhile, partners at Slaughter & May, who have long been associated with the biggest profits, would stand to make a whopping £8 million each on average if the firm floated.
However, a change in structure for the elite firms seems unlikely. Wim Dejonghe, A&O’s managing partner, told the paper: ‘These valuations show there has been a quiet revolution over the last 10 years in the UK legal sector. The leading UK firms are now big businesses. All of this is good for jobs and value creation. However, we still see partnership, rather than flotation, as the best model for our business.’

Investment opportunities

The figures show the possibilities created by the Legal Services Act, which was implemented at the end of last year and permits law firms to accept external investment for the first time. The legislation also allows companies that are not law firms to offer legal services, with global companies such as BT already applying to become alternative business structures to take advantage of the law.