Baker Tilly's Scottish operation has announced a further strategic addition in the shape of Lanarkshire-based James Lockhart & Co.

Baker Tilly's Scottish operation has announced a further strategic addition in the shape of Lanarkshire-based James Lockhart & Co.

It follows the accountancy firm's merger with Scott & Paterson in April, which created the largest accountancy practice outside the Big Four in Scotland's Central Belt, and was the largest of its kind in Scotland's accountancy industry since Deloitte's 1999 merger with Edinburgh-based Rutherford Manson Dowds.

The deals are all part of a plan to ensure the UK firm stays at the top of the mid-tier players in Scotland, for as Baker Tilly's regional managing partner, David Gwilliam, says: "Standing still is not an option. Stand still and you die.

"Those deals, they give us the extra critical mass," said Gwilliam. "Size does matter in our profession these days, and what this is all about is defence in depth.

"Since Enron and the end of Andersen, and the new regulations that have come in the back of that, we have been seeing the clients needing alternatives to the Big Four for their auditing and corporate governance work.

"So it is important that firms like Baker Tilly are large enough to offer a credible choice. Glasgow and Edinburgh are major business centres, with a large number of accounting firms, from one-man bands to the Big Four, all chasing business.

"And the clients range from start-ups to multinationals, acorns to mighty oaks if you like. The James Lockhart acquisition will add to our presence in Glasgow. There's also a good cultural and people fit. And yes it's a small practice, but it positively reeks of quality. And that is what we are looking for. It's a perfect fit, bringing with it quality clients at the little acorn end of the spectrum."

Robert Ross, managing partner at Baker Tilly, Glasgow, added: "I am particularly pleased to be adding a quality business, with great people and a partner that brings a broad spectrum of experience with owner-managed businesses and larger corporates alike."

Indeed, it is all change at the firm. Gwilliam has just completed a move of the combined Baker Tilly-Scott & Paterson workforce into a new HQ at the Edinburgh Quay 2 development in the city's Fountainbridge. And on the back of the move, the firm also announced that Bill Davidson had been appointed as managing partner in Edinburgh.

The new, bigger Baker Tilly group will have a combined turnover of £12m, making it the biggest non-Big Four firm in Scotland's economic heartland. The acquisitions have also enhanced Baker Tilly's profile with its Scottish clients, making it more Scotland-focused than its rival mid-tier firms, BDO Stoy Hayward and Grant Thornton, which Gwilliam believes are more heavily weighted towards London and the south-east.

The new Edinburgh Quay offices will bring together Baker Tilly's five Edinburgh-based partners and 40 staff from its old rented Georgian premises in Queen Street, and Scott & Paterson's 10 partners and 60 staff from their old home on Bruntsfield Terrace.

Gwilliam says the recent moves have positioned the firm ideally for the next leap forward.

He said: "We are now targeting three main areas of growth. Firstly, we've seen a major upswing in our corporate governance work, and we are really stamping our footprint in that field across Scotland, from Sarbanes Oxley compliance, internal auditing and proactive governance. We are also very active in IT consultancy, but core to our practice is our strategic planning advisory work, working closely with clients, getting them to nail down where they want to be, and helping them to get there."

To that end, the firm offers bespoke software tools capable of formulating five-year plans tailored towards growth, restructuring and planning for sale.

The Scott & Paterson merger has brought a well-established corporate recovery business to the firm's offering.

Since Baker Tilly gained its Scottish presence through its 2002 merger with HLB Kidsons, it has been constantly on a growth path.

The recent changes, however, have been the most radical. While the firm is well represented in the SME, charities and educational sectors, the current climate is making it easier to make inroads into the audit market. Baker Tilly already audits the listed groups AG Barr and Anglo Pacific Group in Scotland, and is well on its way to establishing itself as "very much a full-service accountancy and business advisory firm", said Gwilliam. "Our focus is on audit, tax, corporate finance and corporate recovery. We're moving away from being number-crunchers and towards being added-value advisers."