Payment in equity/shares and investing in clients

Very occasionally a client offers to pay in shares and not cash. We cannot accept shares. This is for a number of reasons including:

• Keystone, as a listed entity, cannot acquire other shares.
• An equity sum cannot be divided into the relevant fee notes.
• Equity can't easily be valued or turned into cash.
• Receipt of shares then creates a conflict shadow.

If you are genuinely keen to get shares, then you are best to subscribe for shares in the usual way, at full market price and agree with the client that they will use those monies to pay the Firm's bill. It will then be processed in the usual way and you will get the relevant percentage of your subscription monies back. If you do this though, you should note and follow the guidance on Own Interest Conflicts and, if you are to get some control over the client, e.g. become a director, then the guidance on Becoming a non-executive director.

If you are going to invest in your client, then you need to consider the regulatory aspects. Any transaction between a solicitor and a client will be deemed to be as a result of undue influence, unless you can show it is not. So, you should never ask for equity, it should be the client's idea. You should never have anything to do with setting the value, that must be done independently, and you must not have any hand in advising on, or arranging, the shares issued to you. Before making an investment, you should contact the Director of Operations and Compliance to discuss any impact on your independence.