Presentation by Mr Graeme Fowler

Managing Director
March 2010
The information contained in this document is not intended to be exhaustive and must be considered in conjunction with all other
publicly available information, as disclosed by the Company to the Australian Securities Exchange from time to time.

Disclaimer

This presentation has been prepared by Integrated Legal Holdings Limited (IAW). The information in this presentation is
current as at 22 March 2010.
2010

This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with respect to
any security. Information in this presentation should not be considered advice and does not take into account the investment
objectives, financial situation and particular needs of an investor. Before making an investment in IAW, any investor should
consider whether such an investment is appropriate to their needs, objectives and circumstances and consult with an
investment adviser if necessary. Past performance is not a reliable indication of future performance.

IAW has prepared this presentation based on information available to it. No representation or warranty, express or implied, is
made as to the fairness,
fairness accuracy,
accuracy completeness or correctness of the information,
information opinions and conclusions contained in this
presentation. To the maximum extent permitted by law, none of IAW, its directors, employees or agents, nor any person
accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any
other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation may contain forward looking statements that are subject to a range of risk factors and uncertainties. Whilst
the statements are considered to be based on reasonable assumptions, the statements themselves and the assumptions upon
which they are based may be affected by a range of circumstances which could cause actual results to differ significantly from
the results expressed or implied in these forward looking statements.

Agenda
The Last 12 Months
Financial Performance
gy
Business Overview & Strategy
Priorities & Outlook

The Last 12 Months

The Last 12 Months

Difficult & Challenging Year

G
Global
Financial Crisis
C
(GFC)
(G C)

Small Company with New Business Model/Strategy

Large Acquisitions Relative to Size

Consolidation

Pleasing 1H10

Improved performance

Continued operational improvement

Interim dividend

Financial Performance

Revenue Strongly
g y Higher
g
51%
Growth

Operating Revenue

10.5 mths 08
$m

1H09
$m

2H09
$m

FY09
$m

1H10
$m

6.18

10.69

7.59

9.36

16.95

11.59

Organic and acquisition driven growth

2H08
$m

53%
Growth

FY10 revenue guidance of at least $21m

Developing a track record of strong & consistent revenue growth

Fastest growing legal firm by fee income in Australia 2009

(Source: Australian Legal Business December 2009)

Continued Profitability
2H08
$000s

10.5 months
2008
$000s

1H09
$000s

2H09
$000s

FY09
$000s

1H10
$000s

649

1,544

897

(303)

594

711

1.12 cents

2.66 cents

1.38 cents

(0.45)
cents

0.89 cents

1.03
cents

Reported Net Profit

Reported EPS

2008 comparatives reflect abnormal trading

FY09

Part year effect of foundation Principal remuneration changes & Perth rent increases

Impact of GFC

Initial trading period; new corporate management appointed May 2008

June 2009 quarter revenues below expectations; increases in bad debts

Law Central accounting impairment charge 2H09 $450,000

Immaterial 2H09 contribution from new acquisitions as expected

1H10 - includes 2008 tax refund $325k

8

Operating Cash Outflows

Reported Operating Cash Flows
Includes:

Working capital impact of new acquisitions

Maiden tax payment

+
2008 tax refund

1H10
$m

FY09
$m

190k

(1 65)
(1.65)
(1.53)
(0.96)

0.32

FY09

Dollar value of work in progress and debtors increased

Acquisitions
Organic growth
GFC

FY09 acquisitions very material

New business acquisitions adversely impact short term operating cash flows

FY10

Room for continued improvement of cash flow management

9

Dividends

Dividend Policy

Dividends declared after consideration of Company performance & investment opportunities

Recommencement of dividends to shareholders

Interim dividend 0.25 cents per share fully franked 1H10

Record Date - 10 March 2010

Payment Date - 9 April 2010

Dividend Reinvestment Plan

10

Detailed Operating
p
g Performance
1H10

FY09

Operating Revenue

$m

11.59

16.95

Revenue from Firms

$m

11.58

16.79

Total Net Contribution from Firms

$m
$

1.30

3.13

11.2%

18.6%

Contribution Margin from Firms

Less: Corporate Expenses

$m

(0.64)

(1.52)

Less: Finance Costs

$m

(0.09)

(0.06)

Less: Impairments

$m

(0.00)

(0.45)

Net Profit Before Tax

$m

0.57

1.10

Less: Taxation

$m

0.14

(0.51)

Net Profit After Tax

$m

0.71

0.59

EPS

cps

1.03

0.89

DPS (fully franked)

cps

0.25

0.0

11

Balance Sheet Extract

31 Dec 2009

30 Jun 2009

$000s

$000s
250

600

Trade & other receivables

5,447

4,965

W k in
Work
i Progress
P

2 195
2,195

1 370
1,370

Total current assets

8,365

7,587

Goodwill

10,241

10,372

Total non
non-current
current assets

12 176
12,176

11 694
11,694

Total assets

20,542

19,281

Total current liabilities

4,317

3,799

Total non-current
non current liabilities

1 643
1,643

1 620
1,620

Total liabilities

5,960

5,419

14,582

13,862

5.87

4.89

Cash

Net Assets
NTA p
per share (cps)
( p )

NAB Working Capital Facility

Up to $3.35m
Drawn to $1.85m
(March 2010)
Gearing 13%

Capital Structure
Shares outstanding - 69.4m
Board/employees own 60%
approx.
Approx. 950 shareholders

12

Business Overview & Strategy

13

The Australian Legal

g Industry
y

Big 6-10 firms dominate large company market

No market leader in mid market, SME & HNW

client segments

IMPLICATIONS
Opportunity to develop and
grow a national network of
medium sized firms

Medium sized law firms headcount 30-60

Difficult to attract and retain good lawyers

Hard to provide broad services to clients

Hard to achieve growth (capital)

Young lawyers
Y
l
reluctant
l t t to
t buy
b into
i t
partnership

Some owners seeking a value for their

business

Pipeline of tuck-in
acquisitions

Small sized firms headcount < 20

Hard to compete staff, training, resources,

growth

Opportunity to improve
from cottage industry

Over 11,000 law firms

In Australia.
Approx. 150 medium
Approx
sized firms

Opportunity for leadership

of mid, SME & HNW
markets

14

Top 30 Australian Law Firms by Revenue 2009

Rank

Firm

Revenue
$m

Mallesons

553

Freehills

493

10

Baker McKenzie

155

15

Slater & Gordon

103

20

M
Moray
&A
Agnew

64

25

Thomson Playford

48

30

HopgoodGanim

29

ILH (current run rate)

21

Source BRW October 2009

15

Business Overview

IAW listed on ASX in August 2007 with the goal of developing a national network of
leading law firms in the capital cities and other key centres across Australia

Through its network,

network IAW plans to offer commercial law services as well as capabilities in
specialist areas including superannuation, tax and estate planning, and employment law

Presently:

4 legal
g services businesses

55 lawyers

4 offices

Share price (19 March 2010)

13.5

Shares on issue

69.4m

Market capitalisation

$9.4m

EPS 1H10

1
1.03
03
16

Developing a National Network

Law Central
(Internet Based)

Talbot Olivier
(Perth WA)

Brett Davies Lawyers

(Perth WA)

The Argyle
Th
A
l Partnership
P t
hi
(Sydney NSW &
Melbourne - VIC)

17

Corporate & Commercial

Wealth Management/Protection

Commercial Litigation
g

Superannuation
p

Insurance Services

Taxation Litigation

Media & Defamation

Banking & Finance
Franchising
Government Services
Insolvency
Workplace Relations

Privatte Clien
nts

Busines
B
ss Advisory

Range of services

Taxation Advice
Taxation Audits
Estate Planning & Wills
Succession Planning
g
Family
Property

Business Succession

Employment/Workplace

Taxation Litigation

Criminal

Taxation Advice

On-line legal
g document publishing
g

18

Strategy
gy
Consolidate a national footprint through key geographic centres
Target the mid market, SME and high net worth client markets

Network of leading
legal services
businesses

1. ACQUIRE
Q
15-20 member firms

2. GROW
Above market rates

3. DEVELOP
Improvement

Broadlyy based firms provide

p
some resilience to economic cycle
y

19

Acquisition
q
Template
p
Selective
and
incremental
approach to
acquisitions

Cultural fit

Attitude & objectives of Principals (Partners)

Commitment to growth, improvement & working together

Quality & growth potential of firm

Multiple of maintainable earnings

Acquisition
transaction
structure

Net of ongoing Principal (Partner) base salary

Cash and shares

Employment conditions/restraints

Strict investment criteria

20

Business Model

Freedom within boundaries

Firms retain brand

Firms continue to develop strategy & manage the business

Focus on revenue growth and margin improvement; not cost cutting or centralisation

Performance based remuneration

Profit share to incentivise growth in revenue & earnings

Aligned with shareholder interests

Corporate

Provides boundaries strategic, financial, risk

Support in management improvement & best practices

21

Value Proposition building a better law firm

Traditional Law Firm Model

Integrated Model (ILH)

Goodwill value of the business

Locked in the business

Unlocked for the benefit of the Partners; multiple of maintainable earnings

Working capital

Locked in the business

Released to the Partners capital for growth & investment funded by ILH going
forward

Professional liability

Joint liability for the Partners

Partners are employees, professional liability assumed by ILH

Other personal financial

obligations, commitments, and
risks of Partners

Can be substantial

Absorbed by ILH

Business ownership

Equity Partnership

Freedom within boundaries provides continued ownership of the business,

without financial obligation & risks
Listed company share ownership

Partner - remuneration &

I
Incentive
ti

Partner drawings

Employee base salary

P fit Share
Profit
Sh
incentivises
i
ti i
growth,
th iimprovementt & working
ki ttogether
th

Growth & improvement

Limited by management resources

& financial commitment of Partners

ILH provides profit share incentive, focus, improved processes & best practices

Staff opportunities,
development, training

Limited by personal financial

resources of Partner
Difficult to attract & retain good
lawyers

Availability of resources & funding, and the focus on growth & scale provides
enhanced career & development prospects
Culture, network, knowledge sharing, secondments & transfers

Scale

Limited by personal financial

resources of Partners

ILH funding provides the opportunity for scale advantage size, range of
services, procurement

National Network

Only as part of a national

partnership

Benefits of National Network whilst maintaining firm brand &

management/ownership
Benchmarking, National relationships , tenders, cross selling

22

2010 PRIORITIES & OUTLOOK

23

2 Years on ... we are well p

placed

Good businesses with strong positions in local markets

Building a strong culture like-minded people; common aspirations

Model is starting to work

Fee income growth in member firms

Scope for business improvement

Growth opportunities

Achieve scale to drive profit growth

Strategy delivery will take time slowed by GFC

Good medium to long term prospects

24

Priorities

Continued growth & improvement of existing member firms

Build scale in member firms

Improve cash flow management

E
Expansion
i off services
i

Extend geographic coverage

Build scale for the Group

25

Outlook

Continuing effects of GFC is tempering FY10

Full year effect of cost base changes

Last years acquisitions performing well

FY10 revenues at least $21m

$

24% growth

Assumes no acquisitions

Opportunities for organic & acquisition growth

Prevailing industry issues creating opportunities

T
Target
t $10m
$10 acquired
i d ffee iincome p.a.

26

Contact Details

Graeme Fowler
Managing Director
Level 22, 1 Market Street
Sydney NSW 2000
Phone (02) 8263 6601

27