LAW firm Harper Macleod has managed to break the £10 million profitability barrier for the first time despite its turnover nudging down in the last financial year.

In the 12 months to the end of March turnover at the firm dipped by one per cent, from £26.8m to £26.5m, while partner profits increased by 4%, from £9.8m to £10.2m.

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Chief executive Martin Darroch, who is well known for taking a hard line with costs, said the results show that the firm’s strategy is based on “sanity, not vanity”.

“We constantly work to improve the efficiency and productivity of our business and have quietly reshaped our model over the past few years without compromising our bottom line,” he said.

“After making a number of acquisitions to further our strategic aims, we said the past few years would be a period of consolidation and I’m delighted to say that has been carried out successfully.”

Since 2014, Harper Macleod has bolted on smaller firms Bird Semple in Glasgow, Dowle Smith & Rutherford in Lerwick and Allen & Shaw in Inverness. It also took on a five-partner team from McClure Naismith after that firm collapsed in 2015.

Harper Macleod chairman Lorne Crerar said the firm had been able to make those additions profitable by running a “lean, strategically aligned business”.

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Mr Darroch said that while the firm had experienced growth in most practice areas over the past few years, exposure to the insurance sector had proved a drag on figures, leading the firm to cut back on the amount of work it does in that area.

“After analysing the direction of the UK-wide [insurance] market we made a strategic decision to lower the proportion of our business that accounts for,” he said.