CONSOLIDATION has been the mark of the legal sector over the past 10 years, with many firms turning to merger as a means of insulating against the worst that a financial crisis and an ensuing period of austerity can bring.
For a number of Scottish firms the tie-ups were designed to bring economies of scale after the big Scottish banks, once the lifeblood of the sector, transferred their procurement processes to London in the wake of being bailed out by the UK Government.
Central Belt firm Burness, which long made a virtue of being the go-to Scottish referral firm for numerous City players, was to some degree hedged against the loss of the banking mandates.
Still, it sought to strengthen its position in 2012 by tying up with Aberdeen’s Paull & Williamsons in a deal that gave it access to what at that time was the highly lucrative North Sea market.
Though the deal initially paid off, with the combined firm seeing turnover rise by 11 per cent and profits by 12 per cent in 2014/15, both figures have stalled in the past two financial years, thanks in no small part to the Aberdeen market being hit for six by the oil price slump.
Not that the firm regrets the move, with chairman Philip Rodney saying it transformed what was Burness from “an excellent mid-market firm into a market-leading firm”.
That business is now banking on Aberdeen’s expected re-emergence as a world leader in energy more generally rather than oil specifically as a means of driving its future growth.
Given the shift in how Scottish firms are seeking to consolidate in today’s market this could be crucial, with Maclay Murray & Spens’s recent tie-up with global outfit Dentons highlighting just how international the business of law has become.
Acting for oil companies has seen the amount of multi-jurisdictional work Burness Paull does double in the past five years. Capitalising on that is going to be key to the firm’s success in the next five.
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