In today’s email:

• A legal newsletter on AI

• That Paul Hastings slide

• See art made out of bananas

• Pick your perfect summer festival

• Sonic the Hedgehog buys Angry Birds

• Is a law firm going public always a bad idea?

EDITOR'S RAMBLE 🗣

If you hadn’t noticed by now, I really like email newsletters - and I’m also into tech.

I was thrilled to find this free, daily newsletter which is written specifically for lawyers.

P.S. This is not a sponsorship or anything - I actually just thought it was cool!

Shout out to Josh Kubicki who just reached 1,000 subscribers on there.

LAST WEEK’S POLL 📊 

In last week’s newsletter, I asked your views on ‘that Paul Hastings slide’. Thank you to all of you who sent in your responses - I read all of them.

I was surprised by how balanced the answers were (tbh, I thought 100% of people would be against it).

THE RESULTS:
What do you think about the Paul Hastings slide?

🟨🟨⬜️⬜️⬜️⬜️ ✅At least it's honest (26)

🟩🟩🟩🟩🟩🟩 ❌ This is just not it (65)

91 Votes

via @beehiiv polls

✅ Some arguments you made in favour:

• “It improves discipline. Workers should be expected to work up to the level which they are paid for.”

• “Whilst I don’t agree with it, I would think that the expectations match the pay-bracket? ”

• “I would say it’s not the worst set of expectations out there, but this depends on what background you come from I suppose. Personally, coming from an Asian household this is typically the norm in the work expectations set on us so it’s not a complete surprise…”

❌ Some arguments you made against:

• “This sets a toxic tone from the outset, it makes it clear that your line manager is not going to be supportive if you are struggling with workload, or just generally with the demands of the job.”

• “Expecting lawyers to be "online 24/7" encourages an extremely toxic work culture and leads to burnout. Massive no for a modern law firm imo.”

• “This is a short-cut to mental health issues, burn-out, exhaustion and ultimately people leaving the firm.”

Generally, I think it did contain some good advice at points (like #8 - try to figure something out yourself before asking questions).

But I find some points to be 100% wrong and think they’d be more damaging than helpful in any working environment - things like #3 you are “online” 24/7 and #9 “I don’t know” is never an acceptable answer…

(Cece Xie, a US-based ex-lawyer, has a great breakdown of the slide going through each point).

- Idin

FEATURED REPORT 📰

👋 Ince Group is over

What’s going on here?

Ince Group, a 150-year-old UK-based law firm, has declared bankruptcy and entered administration. Ince said this is because a major creditor of the firm (i.e. someone it owed money to) withdrew its support of the business.

Critics of the firm say that its listed status and poor leadership contributed to its collapse.

What went wrong at Ince?

Ince Group, which had been in business for over 150 years, filed for administration this week.

Here’s a summary of things that went wrong…

• 💸 Poor financial performance: Ince posted profits of £300,000 off £100m in revenue - that’s low. Law firms usually target profits around one third of revenue. That means Ince should have 10s of millions in profits if operating well… not a few hundred thousand!

• 💰 Stock market performance: The firm's share price started 2022 at 35p and ended it at 5.15p - an 85% fall! Ince was, at one point, the largest listed law firm in the UK.

• 🕵️‍♂️💻💰 Cyber attacks: Ince was the victim of a major cyber attack in March last year that cost around £5m to resolve. Hackers stole personal data and threatened to publish the information online if Ince didn’t pay a ransom.

• 🧾🔍 Audit and accounting issues: The company suspended its shares in January this year after delays to the publication of its annual report. Ince missed four separate deadlines it had set for the publication of its audited results. The reason (or excuse) for this was the “complexity of its accounting issues”.

• 🤷‍♂️👎 Internal chaos poor leadership: The firm’s leadership has been heavily criticised. In an article this week, The Lawyer called the firm’s leaders “incompetent”.

As if all of this wasn’t bad anyway, the kicker is that being a listed company meant these issues were made even more public than if they’d happened in a regular law firm - this adds more fuel to the fire.

Why do law firms go public?

Historically, law firms have been private partnerships.

Gateley became the first UK law firm to launch an IPO in 2015 after floating on London’s alternative investment market (AIM). Since then, a few other UK law firms listed on the stock exchange (like DWF, Keystone Law and - of course - Ince).

The benefits include:

• 🌟 Access to capital: Going public can provide a law firm with access to significant amounts of money to fund expansion, acquisition of other firms or investment in technology.

• 💰 Liquidity for partners: Public listing can provide liquidity to partners who wish to sell their equity in the firm, either partially or fully.

• 🔎 Better governance: An IPO means you have to have more public reporting and accountability, which could be attractive to potential clients and investors who value transparency and good corporate governance.

But, as Ince has showed, these benefits are theoretical, so might not always come true.

How about if you were a future trainee at Ince?

Ince is said to take around 12 trainees each year (according to Legal Cheek). This means, as firms hire two years in advance, that there could be 24 future trainees at the firm.

When asked, Ince said they were unable to provide any comment on what’s happening with them.

Sadly, the firm’s existing employees (including trainees) may face losing their jobs during the administration process.

Why should law firms care?

For law firms, going public is a strategic move they can consider. The Legal Services Act 2007 allowed law firms to accept investment from non-lawyers, which opened the path to law firm IPOs.

It’s important for law firms to be able to evaluate the pros and cons of ‘IPO-ing’.

The main benefit of going public, namely accessing more money, is real. Naturally, this would be an appealing offer to any company wishing to invest in itself. But history has shown that firms that go public don’t suddenly become more successful.

The chart below shows how the share value of these public law firms (except for Keystone Law) has fallen over time.

Stories like that of Ince indicate that ‘law firms’ and ‘going public’ don’t mix well. The normal model of partners internally owning the firm is flipped on its head in an IPO, leaving shareholders to externally own the firm, bringing more scrutiny with it.

Public companies also have stricter governance and reporting requirements - for example, public companies have quarterly (four times a year) reporting requirements but private companies only have annual (once a year) reporting requirements. Again, this makes running the firm harder as any issues are more regularly put under a bright spotlight.

Most recently, the firm Mishcon de Reya announced it was going to go public. But last year, it changed its mind (sadly for them, this decision came after the firm spent £11.7m preparing for the IPO).

Mishcon said it was calling the public float off for the “foreseeable future due to market conditions”.

Perhaps Mishcon, like other commercial law firms, is better off postponing it for good.

A BIT OF FUN 😄

But I need experience to get experience. 😕

IN OTHER NEWS 🗞

• 🦔 Japanese gaming giant Sega (the makers of Sonic the Hedgehog) is buying the Finnish company Rovio (the company behind Angry Birds) for £625m. The driving force behind the decision is Sega's interest in strengthening its position in the gaming market by leveraging Rovio's "distinctive know-how in live service mobile game operation". Understanding the reasoning behind a deal like this can help you see how companies make commercial decisions to acquire other companies.

• 🛢️ Exxon Mobil, a big oil company, is being pressured by investors to disclose more information about how it will deal with climate change. Major investors have filed a shareholder resolution requesting Exxon to reveal whether elements of their operation are in line with net-zero emissions targets. This story highlights the increasing pressure on large energy companies to disclose more information about their climate ambitions.

• 🌍️ If you don’t have time to read the FT and BBC Business every day, this newsletter is for you. In today’s global chaos, it can be impossible to keep up with international news. But International Intrigue does all the hard work for you. Get smarter about world events!*

* This is an affiliate link. It's free to join for you and if you sign up through us, we will receive a small commission.

AROUND THE WEB 🌐

• 🍌 Cool: This artist (known as the banana bruiser) makes banana art. Honestly, the video of how she does it is mind-blowing.

• 🐠 Relax: Kill some time by feeding virtual fish food to cartoon koi.

• 😎 Summer: Festival season is coming up. This website acts as a search engine for loads of festivals around the world.

Credit: r/internetisbeautiful

STUFF THAT MIGHT HELP YOU 👌

• 👥 Community for aspiring lawyers: If you're struggling with motivation for law firm applications, check out FlowHuddle - a supportive online community, hosting remote co-working sessions, expert office hours and in-person meet-ups.

• 📕Commercial awareness journal: Check out this journal that we've created alongside the team from The Lawyer Spot. It gives your a simple three-step structure to improve your commercial awareness in a high-quality physical notebook.

• 📣 Advertise with us: If you're looking to reach an engaged audience of over 6,000 aspiring lawyers, drop us an email.