Jim Armitage: Lawyers are right to find floats guilty of long-term harm

JIM ARMITAGE
A number of law firms have recently floated on the London Stock Exchange: Leon Neal/AFP/Getty Images

When asked why he refuses to move with the times, Rumpole of the Bailey responds: “If I don’t like the way the times are moving, I shall refuse to accompany them.”

Rumpole may be a fictional barrister, but many lawyers feel similarly about the current fashion for floating their firms on the stock market.

City brokers and investment bankers may be profiting, but it’s doubtful the firms themselves will fare so well in the long term.

As DWF gears up for a £600 million float, the worry is that this get-rich-quick scheme for the current crop of staff will end in disruption and instability in future years.

Law firms are nothing but a collection of people and a common culture. The traditional partner model, where staff work for a decade in the hope of one day achieving partnership, is what keeps people together and engenders loyalty.

The partnership becomes most lawyers’ prime source of wealth, creating long-term thinking and stability in a firm. Rather than being focused on driving relentless quarterly earnings growth for external shareholders through ill-advised takeovers and other tricks, partners’ interests are based on the strength of the firm decades hence.

So, for example, they will be less likely to fire staff as the economy dips, leaving themselves struggling to re-hire when the work picks up.

Replacing all that with shares staff can easily buy and sell on the market seems a pretty poor substitute.

Rumpole would rightly give a loud harumph to the whole idea.

Silence is golden

Business leaders failed to speak out adequately against Brexit before the referendum two years ago. But they can be forgiven for ignoring the desperate pleas from Whitehall to back the withdrawal agreement.

In a briefing yesterday afternoon led by Philip Rycroft, Permanent Secretary at the Brexit Department, bosses were urged to voice their support for the deal to MPs.

But until we know how the power play in Westminster pans out, they would be mad to comply.

Whoever rises to Number 10 in the febrile times ahead is likely to be an enemy of Theresa May and an opponent of the deal. Why, therefore, risk alienating your business by supporting her now?

Better for the time being to lie low and keep schtum.

Drax boss shows Will to power

Drax chief Will Gardiner is a practical man finding pragmatic solutions to global warming.

He impressed me with his quiet intelligence when we met last week.

One statement of his kept coming back to me in the past 48 hours of Brexit chaos: “We’re in a world where governments are not doing what you would like them to. There’s a lot of problems that need solving, and it’s only businesses who can do it. It’s up to us to solve those problems.”

It’s very hard to disagree with him, isn’t it?