A new survey of finance directors at top-100 firms has revealed reluctance to seek private equity funding or float on the stock exchange.

Earlier this year commercial practice Gateley made history as the first established law firm to float on the London Stock Exchange.

Several other firms have opted to attract investment from private equity houses to grow their business.

But research published today by Thomson Reuters Legal business found general unwillingness to give up control to shareholders.

Of the 26 finance directors who responded to the poll, every one of them saw bank lending as an appropriate source of external funding, with 60% also favouring alternative finance options such as asset finance and invoice discounting.

In contrast, just 16% of those surveyed considered private equity investment suitable, and 8% were in favour of law firms listing on the stock market.

Samantha Steer, head of the large law department at Thomson Reuters, said firms will be watching Gateley’s progress carefully but will be reluctant to commit to new routes of funding without seeing how they work in practice.

‘What’s clear is that top firms are keen to avoid ceding control to external shareholders, perhaps wary of shareholders who expect to see short-term returns on their investment,’ she said.

‘Law firms have yet to be convinced that they can retain the same levels of client service and partner retention under such a radical new arrangement that turns the traditional law firm ownership structure on its head.

‘Until there are some more pioneers to demonstrate the potential for success, law firms are likely to remain hesitant, remembering high-profile failures in recent years of other listed accountancy firms.’

More than half (52%) of those surveyed said they would consider using outsourcing or shared services to boost profits – up from 46% last year.

More than a third (36%) would consider outsourcing drafting and review of legal documents, while 28% would look at outsourcing regulatory and legal research and 16% would consider outsourcing litigation support.

Over three-quarters (76%) of the law firms surveyed are planning to invest in matter management analytics, while more than two-thirds (68%) are preparing to invest in e-billing. The same proportion (68%) plan to implement financial management information systems and 64% are planning to invest in document automation systems.