In the first few months since its eye-catching merger at the beginning of December last year, Burness Paull has climbed the ranks to post revenue and profit growth that contrasts starkly with the fortunes of the traditionally elite Scottish firms in recent years.
The 57-partner firm, formed following the union of Burness in Edinburgh and Glasgow and Aberdeen’s Paull & Williamsons, recorded a turnover of £38.7m, up 59% on legacy firm Burness’ turnover last year of £24.3m. The firm has also rebranded as Burness Paull, dropping the Williamsons part of its post-merger name.
In a statement, the firm said that extrapolating turnover for the full financial year and not just the period post-merger brings out an annualised figure of £38.7m. This translates into an increase in turnover of 3.2% as compared with the combined figures of the two heritage firms for their respective previous years’ trading.
This figure now places Burness Paull as the fourth largest independent Scottish firm by revenue, after Dundas & Wilson, Brodies and Maclay Murray & Spens, and not counting McGrigors, which merged into Pinsent Masons last summer.
Burness Paull also showed that it remains one of Scotland’s most profitable firms, with net profit up 55% to £15.8m, equating to a profit margin of 41%. Inevitably, profit per lawyer is down 43% – due to a significant increase headcount following the merger equating to 168% – and now stands at £43,000. Profit per equity partner is also down 7% from Burness’ solo figure last year, from £370,000 to £343,000.
Philip Rodney, chairman of Burness Paull said: ‘We are pleased with our figures for the year which are in line with our expectations. In a difficult market, where unfortunately many of our peers have slipped back, it is satisfying to see growth in our turnover.’
‘The reduction in profit was budgeted for and reflects the one off costs of our merger. Getting the merger right from the outset, and building a platform for the future was our first priority. Our investment in modern office accommodation and an IT infrastructure across all three offices will provide us with capacity for our longer term strategy.’
‘We are planning for increased growth in 2013/14 and with the synergies generated by the merger coming through, we anticipate an increase in our profits too.’
‘The positive impact of the merger is being seen in many ways that we anticipated. One example is the substantial increase in FTSE 350 clients who have instructed the firm for the first time or developed their relationships since the merger. We are confident going into the new financial year that the merged firm will continue on its planned upward trajectory.’
The firm’s performance is akin to that of its main rival Brodies, which has shared Burness’ successful strategy of focusing being a leading legal services provider to Scottish clients, having seen the cost of expanding south of the border taking its toll on the traditional ‘big four’ Scottish firms – Dundas, Maclays, McGrigors and Shepherd and Wedderburn. Last month Brodies posted revenue growth for the third year in a row, although purely through organic growth. Turnover was up 7.5% to £46m, up on £42.8m last financial year. The firm has credited the successful implementation of the second year of its three-year strategic plan, following on from a revenue increase of 16% in 2011/12, up from £36.9m.
Meanwhile, Scotland’s most storied firms have struggled yet again, with Maclays’ revenues down 13% and PEP down 22%. Dundas did not fare much better – a double-digit fall in revenue for the second successive year combined with a 22% drop in PEP. Shepherd and Wedderburn has proven to be the most resilient of these three: last month it reported a less dramatic 3% decline in turnover for 2012/13, while PEP was down 4%.