I was delighted today to speak at the N+1 Singer investor conference on “Listed Law”. The conference was the brainchild of Trevor Griffiths, Singer’s research analyst, who has started to consider the legal sector holistically as an investment proposition.
This is a bold new development in the investment world. Because investors don’t see many opportunities to invest in the legal sector, as virtually all law firms are private, there has been a tendency not to consider the sector as a whole, and instead to look at disassociated parts of the legal industry separately. That inevitably results in the few investment opportunities for public investors, like Burford, seeming unique and esoteric as opposed to a part of a broad whole.
In keeping with the spirit of the conference, my presentation wasn’t about Burford but rather about the legal sector as a whole. Because the sector is private, it remains difficult to obtain accurate data about all aspects of it, but the information we did find is fascinating and frames an area of enormous economic activity with remarkably little exposure to the capital markets. We've posted my slides here.
One standout point is that the legal sector generates hundreds of billions of dollars every year, yet the global market cap of all listed law firms is less than $316 million. Burford alone is more than six times larger that the entire public legal sector.
Investors who don’t have exposure to the legal sector need to be asking themselves why.