IT IS not so long ago that crowdfunding was seen as a bit niche, something that tiny businesses could use to raise a little bit of cash from their friends.

No more. Thanks in large part to the activities of Aberdeenshire craft-beer firm BrewDog, which has raised £54 million from 75,000 individual investors over the past few years, crowdfunding is increasingly being seen as a mainstream source of finance.

This has come as no surprise to Harper Macleod partner Paula Skinner, who has spent the last six years building a practice focused on helping clients of varying sizes raise cash from the crowd.

“I got interested in crowdfunding in 2012 on the basis that it was not that long after the credit crunch and a lot of clients were finding it difficult to raise funding,” Ms Skinner said.

“I was always looking for another way to help them through and crowdfunding tied in with the ethos of Harper Macleod, which is that we like to think that we do things differently.

“It’s only really in the last two or three years that people have started to sit up and take notice.

“A few years ago other professionals were negative about it – some professionals were negative because it would have done them out of a fee.”

Given the legal profession’s attachment to the billable hour, it is understandable that many firms would shy away from handling work that requires little or no legal advice.

For Ms Skinner, though, the benefits of helping early-stage businesses outweigh the fees lost by guiding a client through a straightforward crowdfunding process rather than going down a more complex fund-raising route.

“We’ve embraced it because if we’re involved, great, but if not it’s still a fantastic client for our firm going forward,” she said.

“All of my clients will need employment advice or real estate advice. They may need commercial contract or branding advice and - hopefully not - but maybe even litigation support

“This type of client base does take a while to generate fees but in 2017 we had over 150 internal referrals from these clients. Some of that will be the same client multiple times but that is a lot of referrals.

“I’ve got high hopes that a lot of the companies we’ve worked with will go on to be great clients of the firm.”

Edinburgh’s Bellfield Brewery is a case in point. Having initially raised nearly £180,000 from 166 investors via the Crowdcube platform, the gluten-free brewery raised a further £430,000 two years later in a non-crowdfunded round, generating legal work for Harper Macleod in the process.

“We started with them when they did their crowdfunding round in 2015 then in 2017 we did a further round with Equity Gap and the Scottish Investment Bank,” Ms Skinner said.

“We have also been involved in employment and real estate issues for them as well as IP and branding.”

In a bid to help capture more clients like this Harper Macleod has formed a strategic partnership with Exeter-based Crowdcube, with both keen to tap into what they believe remains an untapped market north of the Border.

Since being founded in 2011 Crowdcube has helped over 600 businesses raise a collective total of £390m, but just 17 of those were in Scotland.

Plus, of the £19.8m raised, £3.1m - the equivalent of 16 per cent - went solely to BrewDog. The craft brewer has also issued £10m of bonds via Crowdcube.

“I do think we’re getting there now but we have always been behind the curve on crowdfunding in Scotland,” Ms Skinner said.

The aim of the partnership is to raise awareness of the role equity crowdfunding could play in early-stage businesses’ plans as well as the knock-on positive influence that could have on the wider business community.

Given this untapped potential - and the fact that the crowdfunding market has begun to mature in the past couple of years – it is no wonder that other law firms are looking to get in on the action.

Not that Ms Skinner is afraid of anyone stepping on her toes.

“Going by the lists of delegates at certain industry events there are a lot more traditional law firms getting involved,” she said. “The more people who are interested in this space the better for the Scottish economy.”