THE PROBLEM commercial law firms face is that they continue to be judged on the crudest of financial metrics - profit per partner - while their practice mix can lead to large variations in that figure.
Take MacRoberts. Having had its best financial year since 2009/10 in 2015/16, both its turnover and profits slumped in the subsequent year, with overall profitability falling to its lowest level since the firm converted to an LLP a decade ago.
The reason? A lucrative role on the Scottish leg of what came to be known as the Rangers big tax case came to an end in 2015/16, meaning the £2 million in fees it booked in that year were not to be repeated.
The problem with big-ticket litigation is that while it can earn a firm a high profile - and in this case it didn’t because MacRoberts’ role was confidential - it can also lead to wild oscillations in financial performance.
Unlike transactional practices, which tend to bill clients on an ongoing basis, litigators charge for their work when the matter they are advising on concludes.
When that matter is worth £2m it can make a major impact on a firm of MacRoberts’ size - and people only tend to notice it when it is gone rather than when it is earned.
But with future recruits still using profit as a means of differentiating between future employers, and MacRoberts relying on expansion in Dundee and Edinburgh to boost its financials in the near term, the firm will be hoping the 28 per cent bottom-line growth it has recorded in the year so far translates into a full-year bump of the same level.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here