Law firm seeks to pioneer Australia-wide family law network

Known to trade under various names, Australian Family Law being the most prominent one, AF Legal Group is on a mission to become the first company in Australia to develop an Australia-wide family law network.

AF Legal Group is a holdings company that has over time acquired the likes of law firms including Watts McCray, an older firm based in Sydney, and Kordos Lawyers, a family law specialist that practices only family law.

Westferry Investment Group’s managing director Peter Johns featured AF Legal Group as one of his favourite stocks on our The Insider: Meet the Fund Manager session in February.

“There’s some kind of scepticism around this kind of company because of issues that have occurred with law firms and with roll-ups in the past,” Mr Johns said.

“In that regard, I would say that the approach taken by AFL is not necessarily one of a roll-up,” he added, saying the company’s acquisitions in Sydney and Melbourne could help AF Legal Group gain immediate scale.

AF Legal’s main focus at the time was on organic growth through lateral hires – recruiting junior lawyers and talented senior lawyers in need of a change and setting up an office for AF Legal.

“Why we like [AF Legal], first of all, is we see it being managed by a really talented MD in Grant Dearlove – someone whom I think has the unique ability to attract other lawyers to his vision and to the network,” Mr Johns said.

“Secondly, it’s a great area of the law to build a national presence. Family law is a Commonwealth area of law.

“If you go to a family court in Canberra, Darwin or Adelaide, you’re practising exactly the same type of law, same legislation and same core practices, which is different to basically everything else.”

Mr Johns noted that other listed companies relating to legal firms mostly practise personal injury and intellectual property, which have different types of law and court approaches.

“AFL is a company that has a market cap of around $30 million. We are one of the top shareholders.”

Mr Johns admitted that investing in AF Legal Group was a move away from Westferry’s value approach.

“It’s one where I’m prepared to buy at a price where it would be expensive if this was a company that had flat earnings.

“But it’s one where I’d see that they have enormous ability and are so far executing really well in terms of growing to be much, much larger in 3-5 years.”

Click here to view more videos from Peter Johns’ The Insider: Meet the Fund Manager session.

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