Merger. Consolidation. Acquisition. Perhaps not the poetic language of Robert Burns, but certainly the chatter at the recent Burns supper hosted by the Society of Scottish Lawyers in London. Between toasts, views were exchanged on reports of possible cross-border deals and tie-ups already concluded within the Scottish marketplace.
And with legal services reform continuing to advance – north and south of the border – there are other signs of shifts in business practice. Just this week, the big news was confirmed – McGrigors, one of Scotland’s biggest firms, is to merge with Pinsent Masons to create a top 12 UK practice. Earlier, it was revealed that the first firm to be listed on a stock exchange – Australian practice Slater & Gordon – is seeking to acquire English firm Russell Jones & Walker, which has 10 UK offices, including one in Edinburgh. And, fresh from an undisclosed, but presumably sizable, investment by private equity, the QualitySolicitors network appears to be developing its UK-wide presence, with reports of a £15m media account to mount a major publicity campaign.
Our Towards 2020 strategy, published last September, anticipated a trend of more mergers and acquisitions, with fewer but larger firms emerging from a process of consolidation. Likewise, we suggested that, in seeking new business, our commercial legal firms may need to look outside of Scotland. Recent developments – and also the annual PricewaterhouseCoopers survey of the legal sector – would seem to support our analysis.
No doubt the difficult trading conditions are a significant driving force behind some of these changes, and it is certainly true that the economic outlook remains challenging for the next five years or so, not least due to reductions in public spending, which will impact on access to justice for the public as well as the activity of our members. But the coming years will present opportunities as well as threats. And there is evidence of some optimism in the profession. For instance, the Society’s figures indicate that, while 34 firms closed in 2010-11, 54 opened in the same period. The Society’s Cost of Time survey shows that last year’s average hourly cost figure increased for the first time in three years.
The timetable for implementing reform of the legal marketplace has slipped, but the establishment of licensed providers of legal services in Scotland is expected to be possible from late summer this year, providing solicitors with the opportunity to develop new business structures and work directly with other regulated professionals.
Although not the only measure of achievement, economic success is vital to our members. And the Society will do all we can to support our members in the challenging, but also potentially exciting, years ahead. By focusing not on “the cheapest lawyer’s fee” (“barley bree”, or whisky, according to Burns) but on excellence and delivering the highest professional standards, the solicitors’ profession can prosper now and in the future. Let’s toast to that.Lorna Jack is Chief Executive of the Law Society of Scotland