With this week’s news of Rosenblatt jumping into the waters of the public markets, a shift is taking place in the legal industry. As the fourth law firm to float in the UK since 2015, it begs the question: is going public the next big thing for the legal sector?

For legal businesses exploring this option and opportunity, an even bigger question emerges: are firms prepared to address the risk of the public markets?

The benefits of seeking capital from retail and institutional investors are evident. Rosenblatt has publicly stated their aims to use the investments to finance litigation, an increasingly important undertaking for law firms and their corporate clients. Additionally, many firms are looking at public equity as an alternative form of growth and structure to the law firm partnership model.

In a market some estimate to be in the realm of £30 billion, there is no shortage of eager investors looking to get a piece of the lucrative legal sector.

Public companies in sectors with a longer history of listing have long known that shareholders join the forefront – alongside clients/customers and employees –as its most key constituents. Those organizations enlist support from internal and external investor relations staff; company executives frequently address investors and analysts on performance and business goals.

Successful leaders at these companies understand the value of their business is, among other things, directly tied to perceptions of investors. It’s certainly a lesson Elon Musk and Tesla learned the hard way last week, as his public comments on an earnings call led to a one-day drop in the value of the business to the tune of $3 billion.

This is a relatively new landscape for law firms, and it reveals an important point: more than ever, it sharpens the focus on proactive communications and reputation management.

How well do potential investors know your business? How has your leadership reacted publicly to crises or perception of crises? Have you made efforts to raise the profile of your decision makers and key fee earners? Has your firm represented controversial litigants, and how have such cases been discussed in the media?

 These and other related questions will be answered by investors in the form of their committed capital. Equally important – done well, proactive communications and reputation management can provide valuable insurance in the event the firm or its clients are called into question.