WITH HBJ Gateley in the process of negotiating a takeover by English firm Addleshaw Goddard, the Scottish legal market is on the cusp of losing another of its commercial law firm brands.

As was the case with previous market heavyweights Dundas & Wilson and McGrigors, which were swallowed up by CMS and Pinsent Masons respectively, if the deal goes through HBJ Gateley will become the Scottish outpost of a firm whose network includes international as well as English offices as opposed to being a standalone Scottish firm.

Despite this, HBJ Gateley senior partner Malcolm McPherson said there is a “clear and compelling rationale” behind the proposal.

“Clients are increasingly demanding true strength in depth across a range of core specialist disciplines and our exploratory talks progressed very quickly as the complementary nature of our teams and geographical presence became apparent,” he added.

“Given the partner voting process, we’re taking nothing for granted but are quietly excited about the potential for creating something rather special, given our strongly aligned sector focus and specific critical mass in financial services and real estate.”

Indeed, it is because clients operating in the financial services and real estate sectors are becoming more demanding in the way they buy legal services that deals such as this have become more commonplace.

While previously big banks, insurers and real estate businesses would assemble panels of firms that could advise on a range of legal matters, with Scots law as a standalone requirement, they are now taking more of a pan-UK approach.

It is for this reason that Addleshaw Goddard, which previously held talks with Scottish firm Maclay Murray & Spens, is so keen to gain a presence north of the Border. With no Scots law capability it is understood to have missed out on a number of panel appointments.

It is no surprise, then, that Addleshaw Goddard managing partner John Joyce said the HBJ Gateley deal would “deliver on both firms’ aspirations for improved client and sector offerings across the whole of Great Britain”.

“We are culturally aligned and bringing both businesses together will enhance each firm’s bench strength, give greater flexibility and provide a more robust platform from which to establish stronger market positions across core practice areas and in the financial services and real estate sectors in particular,” he added.

But while the upside from the English firms’ point of view is clear, is Mr Joyce correct when he says the Scottish firms entering into such deals stand to benefit too?

Law firm consultant Stephen Gold thinks so and stresses that being able to hold on to client relationships is ultimately of far more importance than attachment to a particular brand.

“The better mergers that have happened have been driven by the demands of clients, as with HBJ Gateley and Addleshaw Goddard, and you can’t argue with that,” he said.

“If you want your culture to be healthy it’s got to be clients first, firm second and me last. The important thing is that firms thrive.

“There’s an understandable attachment to traditional names and there are some who feel it’s a shame when a distinctive brand goes but the important thing is what works economically because that’s what creates good jobs.”

The sentiment is shared by Law Society of Scotland chief executive Lorna Jack, who said the disappearance of well-known names in the legal sector does not, as is sometimes assumed, lead to a devaluation of the Scottish legal profession.

“While there may be disappointment that some well-known legal names are no longer present in Scotland, these changes have not diminished the brand of the Scottish solicitor and for many will have created new opportunities in developing their careers.

“It is important that Scotland has a strong legal profession to ensure that those living, working and operating businesses in Scotland are well-served by its legal system. It’s equally important to remember that firms headquartered outside Scotland, remain big employers of Scottish solicitors who serve a wide client base within Scotland, elsewhere in the UK and across the globe, and they will continue to make a significant contribution to the Scottish economy.”