Legal figures predict slowdown in merger activity this year

Recent years have seen big names including Dundas & Wilson, McGrigors,Biggart Baillie, Tods Murray and Semple Fraser disappear from the scene.

Late last year Addleshaw Goddard and Maclay Murray and Spens (MMS) were reported to be in merger talks, with a deal likely to be struck in the summer.

Kirk Murdoch, Pinsent Masons chairman for Scotland and Northern Ireland (pictured right) told The Herald there are fewer options for firms looking to merge.

He said: “While there could be other law firms pledging their future together, the number of viable partners is much diminished.”

Chief executive of Harper Macleod, Martin Darroch, said much the same, adding: “Compared with what has gone before, I think the Scottish market is likely to be pretty dull in the year ahead.

“Beyond the takeovers which have already been agreed this year, I don’t expect to see anything of significant scale.

“We’ve seen so many of our traditional names disappear over the past couple of years that we’re getting to a stage where there aren’t many candidates left, though no doubt we’ll continue to see smaller firms either merging with equals or going into bigger firms.”

In contrast, Philip Rodney, chairman of Burness Paull (pictured right) said: “We haven’t seen the end of that dynamic. At every level we will see some firms huddling together for warmth.

“We will see more takeovers by English firms with the Scottish end becoming north-shoring operations. And I’m sure we will see a few clever tie ups driven by strategy rather than short term expediency.”

Shepherd and Wedderburn’s chief executive Stephen Gibb and Caryn Penley, joint executive partner in Scotland for CMS also expect further deals this year.

Meanwhile, Brodies’ managing partner, Bill Drummond, said: “Nothing will surprise me after what we have seen happen in the legal market in recent years.”

Mr Gibb (pictured right) pointed to opportunities for Scots firms in other jurisdictions, saying: “What we have not done enough yet is look internationally. I think we have a lot to offer the likes of the US. If you look over there the cost of lawyers is really high.

“Somebody coming straight out of college will be paid about $160,000 a year which is a huge amount of money and way beyond what a graduate would be paid even coming in to a firm like us.

“So what that means is I think there is a cost effective job to be done on work that is being lost in America to the professional outsourcers.”

Mr Rodney suggested firms could do more to help each other.

He said: “I think it would be good to see firms working together collaboratively supporting each other in areas where they don’t compete. I would also like to see an increased profile for Scottish law as a brand. There are some material benefits that come from litigating in Scotland. It would be great to see wider recognition of that.”

Stephen Millar, joint executive partner in Scotland for CMS, said: “It would be great to see more done across the sector in terms of enhanced training and the development of skill sets which are suited to a wider international client base to continue the growth of the Scottish legal sector’s reputation as a global centre of excellence.”

Mr Gibb also warned of the challenge posed by firms based in the north of England including in Manchester, Newcastle and Leeds as they look to make savings by moving to cheaper centres.