Companies listed on the Alternative Investment Market (AIM) put the quality of their legal team ahead of the fees they pay, research has revealed.

The Taking Aim survey 2004, which polled 100 UK and 10 overseas AIM quoted companies, found that 83% rated the quality of their legal team as 'very important'.


The next most important attributes in legal advisers are their speed of response (73%) and value for money (65%). Experience in merger and acquisition work is also prized, with 50% of respondents saying this is 'very important'.


The findings come as - in marked contrast to the main market of the London Stock Exchange - AIM enjoys a surge of interest.


By the end of July, some 153 companies had joined the market and £2.5 billion had been raised. With another five months to go, 2004 is already the second most active year for AIM since it was launched in 1996 and it could yet outstrip the record year of 2000, when the height of the dot-com boom saw 265 entrants and £3.1 billion in funds raised.


This mini-boom has been driven in part by the use of AIM for accelerated initial public offerings, as well as the increasing number of foreign companies using it to raise funds.


Max Audley, head of corporate finance at the London office of US firm Faegre Benson Hobson Audley, which sponsored the survey, said: 'There's been a real change in the last three to four years and it [AIM] has become a mature market. While the dot-com bubble blew away other secondary markets, AIM survived.'


However, Mr Audley added that law firms were competing fiercely for instructions. 'It has never been a high fee market - the attraction is that you can get the client's future work,' he said.


Hugh Maule, a corporate partner at City firm Lawrence Graham, agreed that the market for AIM work was still price-competitive.


However, he added that with the likes of US investment banks JP Morgan Chase and Merrill Lynch seeking nominated advisor status, the future for AIM continued to be promising.