McClure Naismith, one of Scotland’s oldest legal practices, is in talks to be taken over by another law firm, following months of speculation about the state of the Glasgow-based firm’s finances.

Executive Chairman of McClure Naismith Robin Shannan told the Sunday Herald that the firm “had not been enjoying the easiest of times in recent times” and that its large banking department had been strongly hit by the financial crisis and subsequent recession.

“We are still trading and working towards a merger possibility which we are keen to get done in the best interests of clients,” he said. “Some parts of the business are doing very well.”

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Shannan, who heads up the firm’s commercial and financial services unit from its London offices, said that the mid-sized firm had for some time recognised that it needed to become a “bit bigger” in order to compete effectively in the market for commercial legal services. “We have tried to grow organically but are now looking at a merger with a larger firm as the best way forward,” he said.

“The legal market is consolidating with the emergence of large, UK-wide multi-disciplinary firms and smaller, specialist practices. We are finding that medium-sized, independent firms such as ours lack the scale needed to compete.”

He added that the firm’s 26 partners are “looking to take as much of the firm to one destination as we can” but could not rule out the possibility of some parts of the business being broken up.

In May this year the limited liability partnership, which is currently seven months late in filing its accounts for the year to April 2014, was threatened with being struck off the Companies House register and being dissolved after failing to confirm that it remains a trading entity.

Officials at Companies House subsequently withdrew the threat after McClure Naismith claimed that it had “embarrassingly” misread a notice asking it to confirm its trading status.

In May a spokeswoman for the practice said that “technical issues” were the reason for the late accounts and that the accounts would be submitted “very soon”, but three months later the accounts have yet to be filed.

Shannan last week repeated that the practice’s accounts, which were supposed to be filed by 31 January, would be filed “soon” but was unable to give a date. Under the Companies Act 2006 a private company can be fined £750 when its accounts are three months late rising to £1500 when they are over six months late. In addition, failure to file annual returns or accounts is also a criminal offence that can result in directors being handed unlimited fines.

McClure Naismith’s most recently filed accounts for the twelve months to 30 April 2013, show that turnover fell to £12m from £13.1m the previous year. The accounts also show that profits before partners’ pay and profit share fell 8.6 per cent from £3m in 2012 to £2.7m in 2013 following falls of 15 per cent in 2010/11 and 13 per cent in 2011/12.

Shannan denied that any lay-offs of staff have so far taken place and said that the partnership would not disclose which law firms had been approached about a possible merger, adding that he could not confirm speculation that a team of seven McClure Naismith partners are set to move to rival Glasgow-based firm Maclay, Murray & Spens.

McClure Naismith was founded in 1826 in Glasgow and opened offices in Edinburgh in 1979 and in London in 1991. In addition to partners, the firm employs 17 associates and consultants and has a total of 135 employees.

Philip Rodney, the chairman of one of Scotland’s largest commercial law practices Burness Paull, told the Sunday Herald that, following the financial crisis of 2008/9 and despite a number of high-profile mergers and acquisitions – such as last year’s purchase out of administration of Tods Murray by Shepherd &Wedderburn – “there are still too many law firms in Scotland”.

“Generally there is now more confidence in the business community but there has been polarisation in the market for legal services,” he said.

“Some firms, those that have reconfigured themselves and have a proper strategy, are doing very well while there are other firms who have not adjusted who have been waiting for the good times to come back.”

• Last week Edinburgh-based Simpson & Marwick confirmed to the Sunday Herald that, after at least four months of negotiations, it continues to be in advanced merger talks with London-based UK top-20 firm Clyde & Co.

If a deal is reached it would see Simpson & Marwick’s five Scottish offices and three English offices added to Clyde & Co’s 38-office international network.

Simpson & Marwick had previously been set to merge with insurance specialist Kennedys in 2013 but the deal was abandoned at the end of last year after months of negotiations.