There will be further consolidation in Scotland's legal sector in the year ahead, with US players showing interest, Burness Paull chairman Philip Rodney has predicted.
In a year which saw Dundas & Wilson swallowed by London-based CMS, and Tods Murray bought out of administration by Shepherd &Wedderburn, in both cases in the wake of weakening performance, the leading independent Scottish firms all performed strongly. Burness Paull lifted turnover by an impressive 20 per cent to £46million and net profit by 25 per cent to £20.7m, edging ahead of Maclay Murray & Spens which posted £43m turnover, while Brodies led the pack with turnover at £52m and net profits rising 23 per cent to £23.7m.
Mr Rodney said: "I think there will be more casualties.There are too many commercial law firms in Scotland for the reduced business there is post-2008. Some firms have still got their heads under the bedclothes, assuming eventually there will be business as usual, but I think we are not going to see enormous growth over the next couple of years. For some firms it will be death by 1000 cuts, and we might see more insolvencies."
A big US firm was currently showing interest in the Scottish market, Mr Rodney said. "The US firms have been pushing into London, and having greater success in lateral hires from the key London firms. It is almost inevitable they will start looking to regional England and Scotland to get the expertise there."
The Glasgow lawyer, who led Burness into a merger with Aberdeen-based Paull & Williamson two years ago, said the firm was proving that big cross-Border mergers were not the only route to growth. Its international collaboration model was now delivering 20 per cent of turnover, working in 55 jurisdictions, and the firm had recently won from clients such as Wood Group, Weir, GE and Chivas "the type of business that neither of the firms would previously have picked up".
Mr Rodney said the firm had been running a 'Project Best' with an independent consultant, to ask clients what they expected from their law firm in five years' time. "One of the messages is that they find it difficult to believe that a firm can have a centre of excellence in every jurisdiction, they would rather have the 'best of breed' in any jurisdiction. That is why the collaboration model works well, providing it is backed by protocols which make it easy for the client."
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