Ann: FY19 Half Year Results Announcement Date, page-46

Hi Bobspongo,Thanks for the constructive response.
"The law firm has an obligation under the Corporations Act 2001 to act in shareholder's best interests but under the various legal profession acts its first duty is to the court. That is probably an academic/philosophical arguments but may show why most other common law jurisdictions haven't taken to listing law or accounting firms with the vigor Australia has."

Long term there's a reason this is more than just an academic question for investment in a listed law firm and that reason is regulatory risk.There is always the possibility that government will roll back the legal changes that allow non-lawyer ownership of law firms or put other controls in place. How likely this is depends the on political will to make such a change, and it would take a high profile scandal that highlighted this conflict of interest. (The financial implosion of Slater and Gordon is the wrong kind of scandal)

As to the merits of this argument... As someone who isn't in the legal profession but is invested in Shine, I don't see why law is exceptional from other industries. All companies deal with the conflicting concerns of customers, shareholders, and employees. In fact there are many high profile pundits that disagree with the idea that a company's primary duty is to it's shareholders and that they should put the interests of customers and/or employees first.

The reality is that it is in the interests of any company -and therefore the shareholders - to look after it's (profitable) customers and/or (productive) employees within reason. This alignment can fail in two ways:
1. The executives either misunderstand or are incentivized to act against the best interests of the shareholders.
2. The customer or the employee is not profitable in comparison to their cost

In the case of the later - for reputational reasons - it is generally in the interest of the company to service individual unprofitable clients anyway but rather to systemically focus business on areas that are more profitable over-all. If the company is being unfair to clients then that company will not be around for long - market competition will sort them out. If a type of customer is systemically unprofitable then the company shouldn't service them. The shareholder's long term interests should be aligned to treating customer's fairly but the actions of company executives may end up conflicting with both customers and shareholders.

All of that applies to any kind of company including lawyers, however it is notable that the lawyer's "first duty is to the court" and not to the client. From the perspective of publicly listed law firms perhaps this is analagous to any listed company's obligations to government and various regulatory authorities. A company (law firm or otherwise) can't just breach regulations or the law because it would be profitable for shareholders.