London disputes specialist Rosenblatt is trying something new with its planned launch of a litigation funder, while three law firms have also highlighted their innovation wares by collaborating with a litigation start-up.
Rosenblatt this week (8 May) raised £43m in its listing on the Alternative Investment Market (AIM), giving the 21-partner firm a market capitalisation of £76m in what it described as a ‘significantly oversubscribed’ float. It was the fourth and biggest law firm initial public offering (IPO) to date.
Rosenblatt chief executive Nicola Foulston told Legal Business: ‘We have raised funds to fund our own lawyers. We are not currently operating as a third-party funder like Burford, but if someone says they have a case and they want our resources, we can take risks because we can afford to.’
Foulston added the firm ‘would be opening a third-party funder in the next couple of years’, however, and said ‘it would be a separate entity with a very strong steel wall between it and the firm’.
Foulston also argued the firm’s chief executive model, notably with a lack of senior partner, would be a key strategic boost going forward: ‘I am completely stunned that the sector is still dominated by those [senior partners], who are of course exceptional lawyers, but it makes them think they are capable of doing the job I do.’
‘The main benefit of our model is motivating and attracting talent. It moves the model away from a core base of equity partners who make decisions impacting their earnings, instead I make those decisions and the partners are rewarded. Everyone benefits from it.’
Foulston joined Rosenblatt as chief executive in 2016, specifically to oversee the firm’s journey to an IPO. She previously acted as chief executive of motor sport company Brands Hatch, joining in 1990 and managing the business’ 1996 listing on the London Stock Exchange. In 1999, Foulston was in charge as Brands Hatch was sold for $195m to US marketing giant Interpublic.
The firm is backed by respectable recent revenue growth. In the last financial year to 31 December 2017, Roseblatt recorded a 3% rise in revenue to £15.9m, while EBITDA grew by 28% to £5.5m.
Foulston says that while the firm is open to branching out into other areas, it remains focused on litigation work. The firm recently acted for Richard Desmond’s Northern & Shell in the high-profile £127m sale of its newspaper business to Trinity Mirror, marking the end of Desmond’s 43-year-long publishing career.
Rosenblatt’s share price rose to 111p just after the market opened, but stood at 105p early Thursday (10 May).
The firm’s listing follow Gateley’s pioneering 2015 float, which raised £30m, and the listings of Gordon Dadds and Keystone Law, who last year raised £20m and £15m respectively.
In other disputes news, Mishcon de Reya, Baker McKenzie and Taylor Wessing have teamed up with LitiGate, a Tel Aviv-based legal tech start-up.
LitiGate, founded by ex-litigator Nimrod Aharon and AI practitioner Guy Uziel, uses machine learning algorithms to review arguments and suggest counter arguments and fall-backs. The technology is able to rely on a database of previous case law to recommend the optimum argument.
The start-up was one of five companies selected this week to feature in Mishcon’s incubation programme, MDR LAB. Nick West, Mishcon’s chief technology officer who oversees the programme, said the firm would ‘eagerly anticipate getting to know them, to understand what their technology can do and to help them perfect their product’.
All three firms will be providing their resources to further boost LitiGate’s development. Taylor Wessing partner Laurence Lieberman commented: ‘We are constantly looking for innovative solutions that will maximise efficiency to ensure the best outcomes for our clients, and reduce the overall cost of litigation.’
Mishcon’s MDR LAB, which ran for the first time last year, invites legal start-ups to work with the firm’s lawyers over a 10-week period during the summer.