Legal Business

A Brexit veto? The best-laid plans for Scotland’s future in the UK and in the EU

A Brexit veto? The best-laid plans for Scotland’s future in the UK and in the EU

Brodies’ Christine O’Neill looks at the constitutional and legal position north of the border

It might be premature to say that the dust has settled on the result of the EU referendum. Although the initial shock of the outcome has worn off, there has been ongoing upheaval with a change of prime minister, the abrupt ending (and revival) of several political careers and the launch of a leadership challenge within the opposition.

Legal Business

Financials 2015/16: Scottish independent Brodies continues strong form with double-digit revenue and PEP growth

Financials 2015/16: Scottish independent Brodies continues strong form with double-digit revenue and PEP growth

One of the big four remaining independent law firms in Scotland, Brodies has continued its strong form announcing revenue growth of 12% from £57.9m to £65.1m, while profits per equity partner (PEP) is up 13% from £532,000 to £602,000.

In addition, profit before partner distributions rose by 14.2% to £30.9m and cash balances rose 7.3% to £15.9m as the largest law firm in Scotland continues to grow its ranks.

Speaking to Legal Business, Brodies managing partner Bill Drummond said the result was consistent with the sort of financial performance that the firm had sustained over a lengthy period of time, however he added that numbers were affected negatively by macroeconomic conditions, particularly in the last quarter.

‘As managing partner I am always keen to see the business perform to its full potential and if market conditions had been a bit buoyant in the fourth quarter of our financial year when some of the market concerns were starting to kick in we would have done better than that the way things were going.’

In a statement Drummond (pictured) added: ‘It is clear that we have entered a period of uncertainty, however we stand ready to support organisations and individuals, whether in Scotland, the rest of the UK or overseas, in facing the challenges that the Brexit vote will present as well as the opportunities that will undoubtedly emerge.’

During the last financial year the total number of lawyers and staff at Brodies grew by 4.6% from 603 to 631, while the number of partners rose from 82 to 91.

Last November the firm took its private equity offering up a notch by hiring Freshfields Bruckhaus Deringer partner Karen Fountain as part of a double hire into its corporate group. Alongside Fountain, Brodies recruited CMS Cameron McKenna partner Douglas Crawford.

In February, Brodies re-elected Drummond as well as its chair Christine O’Neill to another term in each role.

Drummond was first elected in 1998 and has served the firm for 35 years. As the firm’s head, he takes on strategic development, hands-on management and the job of bringing greater transparency to professional development across the firm.

The only other major Scottish firm to release financials so far this year has been rival independent Maclay Murray & Spens which had another disappointing year financially, with a 12% drop in PEP from £283,000 to £248,000, while turnover is up 3% to £44.8m.

kathryn.mcann@legalease.co.uk

Legal Business

Seventh term for Drummond at the helm of Brodies as Scots indy continues its emphatic form

Seventh term for Drummond at the helm of Brodies as Scots indy continues its emphatic form

Brodies has re-elected both its chair Christine O’Neill (pictured) and managing partner Bill Drummond to another term in each role.

The Scottish firm’s partnership unanimously re-elected O’Neill to serve a second consecutive term as its chair having first been elected to the position in 2013.

Litigator O’Neill will continue to work closely with Drummond who has been re-assigned as managing partner for the seventh consecutive three-year term, in what is one of the UK’s longest-serving managing partner roles.

Drummond was first elected in 1998 and has served the firm for 35 years. As the firm’s head, he takes on strategic development, hands-on management and the job of bringing greater transparency to professional development across the firm.

The firm was in growth mode last year and in November took its private equity offering up a notch by hiring Freshfields Bruckhaus Deringer partner Karen Fountain as part of a double hire into its corporate group. Alongside Fountain, Brodies recruited CMS Cameron McKenna partner Douglas Crawford, who starts in May.

This came after the firm hired a 15-strong family law team including its head from rival firm Simpson & Marwick in May.

It wasn’t a bad year in terms of financials either, after the firm turned in a strong financial performance, reporting a double-digit growth in both revenue and profits per equity partner (PEP) in its audited accounts for the 2014/15 financial year. Gross revenues rose 11% at the firm to £57.9m for the 2014/15 financial year from £52.1m in the previous year, while PEP jumped 12% to £532,000, up from £474,000 the previous year.

jaishree.kalia@legalease.co.uk

 

Legal Business

Brodies hires Freshfields partner Fountain amid double corporate hire

Brodies hires Freshfields partner Fountain amid double corporate hire

Scottish firm Brodies is taking its private equity offering up a gear by hiring Freshfields Bruckhaus Deringer partner Karen Fountain as part of a double lateral hire into its corporate group.

Brodies has hired fund specialist Fountain and CMS Cameron McKenna private equity partner Douglas Crawford to increase the number of partners at the firm to 94.

Fountain, who recently finished advising Barclays on the spin-off of its natural resources private equity fund, retired from Freshfields in April after 15 years at the firm, having joined from Slaughter and May in 1999. She was a partner for 12 of those years, becoming a key part of the firm’s City funds group.

Intent on returning to Scotland upon her retirement, Fountain joins Brodies’ Edinburgh office, bringing with her expertise in fund formation, joint ventures, investor and management arrangements and regulatory issues.

Crawford, already a senior name in the Scottish legal market, leave CMS just 18 months after the firm’s rescue deal for Dundas & Wilson.

Crawford, who spent five of his 17 years at Dundas & Wilson heading the former Scottish elite firm’s corporate department, joins Brodies as head of private equity.

The energy specialist, who is particularly active in the oil and gas space, will join the firm’s Aberdeen office. Graphite Capital and Bank of Scotland are among his clients. 

The appointments will boost the firm at a time – according to managing partner Bill Drummond – when private equity work is buoyant in Scotland, filling holes left by the relocation of banking work to the City post-Lehman.

Drummond said: ‘At a time when the role of private equity and funds in stimulating a return to economic growth in Scotland and the wider UK is ever-more important, we are very pleased to be looking forward to welcoming Doug and Helen to Brodies. Their expertise will be of value to many clients looking to make investments and establish new vehicles to take advantage of that growth and help stimulate more economic activity.’

tom.moore@legalease.co.uk

Legal Business

Scottish GCs – The pressure is on

Scottish GCs – The pressure is on

As part of our Regional Insight series, we met with senior in-house lawyers and partners from Brodies in Edinburgh to discuss the key issues facing GCs working in Scotland.

The most heavily-used phrase among in-house counsel and private practice lawyers alike is ‘trusted adviser’, so it is therefore unsurprising that this became the first major topic of discussion on an agenda looking at the key pressure points facing in-house counsel. Stuart Clarke, head of legal at Scottish Enterprise, says it is fundamental to be seen as being at the heart of your organisation’s thoughts on how it is going to deliver its business plan.

Legal Business

Brodies’ rise continues with fifth year of revenue growth and profits up 14%

Brodies’ rise continues with fifth year of revenue growth and profits up 14%

Scottish firm Brodies has once again turned in a strong financial performance, reporting a double-digit growth in both revenue and profits per equity partner (PEP) in its audited accounts for the 2014/15 financial year.

Gross revenues rose 11% at the firm to £57.9m for the 2014/15 financial year from £52.1m in the previous year, while PEP jumped 12% to £532,000, up from £474,000 the previous year.

The profit growth comes despite a 9% rise in costs to £30.9m, and the firm saw a 14% increase in profits before partner distributions to £27.1m, while cash balances at the firm grew by 53% to £14.85m. The firm reported no external debt.

The rise in numbers marks the firm’s fifth consecutive year of revenue and profit growth, and a 12% compound annual growth rate over the past decade. Last year, Brodies posted a 13% increase in revenues after breaking the £50m barrier, alongside a 10% rise in PEP.

Overall lawyer and staff headcount at the firm grew 7% from 564 to 603, while partner heads increased by two to 82 up till the end of the last financial year. However, the firm currently houses 92 partners after a spate of lateral hires joined the firm recently including, in June, rival firm Simpson & Marwick’s well-regarded 15-strong family law team and its former head Shaun George.

Investments saw the firm move into new purpose-built offices, Brodies House, in Aberdeen while plans are underway to move its Glasgow offering to new premises. The firm’s IT systems were also improved with the firm achieving certification to the 2013 version of ISO 27001.

In addition, Brodies boosted its partnership by seven in a bumper promotions round – a significantly larger round than in the last two years – while promoting nine to a newly-created managing associate role.

Brodies managing partner Bill Drummond said: ‘The past financial year saw gradual improvement in the Scottish and wider UK economy, the historic referendum on the question of Scottish independence and continued change in the Scottish legal market, with the disappearance of yet more well-known independent firms. Against this backdrop, Brodies focused on delivering and investing in client services and engaging with individuals, business and organisations across the UK on the legal aspects of potential constitutional change.

‘Improved economic stability led many clients to invest in their businesses and ventures and re-visit their personal affairs, and as a result our lawyers have been busier than ever, with those handling disputes and regulatory issues becoming particularly active in the second half of the year.’

jaishree.kalia@legalease.co.uk

Legal Business

Hiring the team: 15-strong group exits Simpson & Marwick to join Brodies

Hiring the team: 15-strong group exits Simpson & Marwick to join Brodies

Scottish firm Simpson & Marwick’s well-regarded, 15-strong, family law team, including its current head Shaun George, has quit the firm to join Brodies.

Alongside George, family law partners Richard Smith and Lisa Girdwood will also join Brodies in a bid to expand the firm’s client base among international families with Scottish members and interests. The trio are joined by a team of 12 including three associates and four solicitors, who will all join Brodies’ personal and family department on 1 June 2015.

George will be based in Brodies’ Aberdeen office and will head the firm’s family law team, succeeding Edinburgh-based partner Scott Cochrane, who has led the team for 13 years. George leaves Simpson & Marwick after eleven years having joined from Burnside Kemp Fraser, where he was a partner for three years from 2001.

Smith will be based in Brodies’ Edinburgh office alongside Scott, while Girdwood, was previously head of family law and litigation at Bonar Mackenzie before joining Simpson & Marwick in 2011, will primarily be based in the Glasgow office.

Bill Drummond, managing partner of Brodies, said: ‘Shaun, Richard and Lisa have an outstanding reputation among their clients and the Scottish legal sector alike for their expertise, which extends to mediation and collaborative family law.’

‘This move is designed to enhance the breadth and depth of those services in a world where longevity, multi-jurisdictional asset ownership and growing legal and tax environment divergence and complexity all require careful consideration by individuals and families.’

jaishree.kalia@legalease.co.uk

Legal Business

Partner promotions: Watson Farley and Brodies promote seven while TLT surpasses 100 partners

Partner promotions: Watson Farley and Brodies promote seven while TLT surpasses 100 partners

Watson Farley & Williams, TLT and Scottish firm Brodies are the most recent firms to announce their partner promotions with both Brodies and TLT expanding their rounds while Watson Farley nearly halved the number of lawyers it made up.

Watson Farley’s promotion round is almost half of last year’s total when the firm made up 13 associates. Of the seven new partners, three were made up in London, the same as last year, and one each in the firm’s Frankfurt, Hong Kong, New York and Paris offices, bringing the total number of partners to 140.

This year’s promotions went into effect at the start of the month (1 May) and included two female associates being promoted, with one based in Paris within asset finance and another in London’s corporate team. Other practice areas that saw promotions were corporate, disputes, finance and tax.

TLT, on the other hand, promoted two more than 2014’s level, making up six lawyers to partner and bringing the firm’s total partner headcount to over 100 for the first time.

The promotions, which went into effect on 1 May, were in the firm’s commercial services, and banking and lender services groups, with lawyers based in Belfast, Bristol, London and Manchester.

TLT also promoted to 12 associates to legal director. ‘This year’s promotions demonstrate continued growth across all our UK offices and core areas of expertise,’ said TLT senior partner Robert Bourns. ‘Success depends on our clients recognising value in what we do and our people collaborating to better support each other and deliver effectively for our clients.’

Meanwhile, Scottish law firm Brodies has also had a large round of promotions, making seven up to partner, while promoting nine to a newly-created managing associate role.

All seven promotions were made in different practice areas and took the total partnership headcount to 89. Last year the firm made up just four to its partnership.

Christine O’Neill, chairman of Brodies, said: ‘Our newly promoted partners have impressed our clients, demonstrated excellent legal and leadership skills, and are attuned to the marketplace and future direction of the sectors they serve.

‘This new position [managing associate] acknowledges that a number of our experienced associates are already performing important management roles across the firm in delivering our client services. This may include managing teams or being the lynch pin for the delivery of transactions.’

The 2015 promotions are as follows:

Watson Farley Williams:

Ravinder Sandhu – corporate, London

Andrew Ward – disputes, London

Andrew Waters – disputes, London

Daniel Pilarski – tax, New York

Alexia Russell – finance, Paris

Frederik Lorenzen – finance, Frankfurt

Christoforos Bisbikos – finance, Hong Kong

TLT:

Alice Gardner, corporate

James Chadwick, banking and financial services litigation

Paul Gair, banking and financial services litigation

David Gardner, technology and IP

Richard Houliston, banking and restructuring

Sian Ashton, commercial disputes

Brodies:

Tom Boulton-Jones, corporate

Laurence Douglas, retail & leisure, real estate

Matthew Farrell, business disputes and asset recovery

Charles Livingstone, public law and regulatory

Marion MacInnes, banking and finance

Chris McDaid, commercial real estate

Murray Soutar, land and rural business

jaishree.kalia@legalease.co.uk

Legal Business

Scottish revival: Growth for Brodies, Maclay and Shepherd as Scots independence vote hangs over recovery

Scottish revival: Growth for Brodies, Maclay and Shepherd as Scots independence vote hangs over recovery

Described last year as both beleaguered and bleak, the Scottish legal market is this year seeing something of a revival as revenue at Maclay Murray & Spens (MMS) – one of the LB 100’s worst performers in 2013 – was last week revealed to have risen by 7% from £40.4m to £43.3m and profit per equity partner (PEP) jump by £50,000 to £261,000, a 24% hike.

The results – which follow Scots rival Shepherd and Wedderburn’s 2014 turnover increase of 6.7% to £38.3m and a PEP increase of 9.8% to £278,000 – came in the same week that Brodies, one of the standout performers among its Scottish rivals last year, unveiled a fourth consecutive year of turnover and profit growth, with a 13.2% increase in revenue to hit £52.1m.

Final leading Scottish independent Burness Paull, created out of the December 2012 merger of Burness and Paull & Williamsons, has yet to publish its results but is understood to have had another good year, after 2013 saw it unveil a turnover of £38.7m, up 59% on legacy firm Burness’ £24.3m revenue at the end of 2011/12.

Dundas & Wilson, which merged with CMS in May this year, is expected shortly to unveil its last independent set of results, after a poor financial performance saw its turnover drop by 35% post-2008 to £48.7m.

MMS has put its growth this year down to improved market conditions and strong performances in corporate, tax, real estate, construction and financial services work that allowed the firm to invest further in five lateral hires last year.

Chief executive Kenneth Shand told Legal Business: ‘There are generally improved market conditions and more confidence, with more investment available to businesses.’

Having last year seen revenue drop by 33% over the five-year period since 2008, the firm’s latest financial results don’t go as far as putting it back to pre-Lehman levels, but its drop over a five-year period has been reduced to 21%.

Shepherd’s latest figures mean last year’s drop in revenue of 16% since 2008 has fallen to 3% since 2009.

It is a substantial recovery and Shand added: ‘The legal sector has faced a period of considerable economic uncertainty and has also had to tackle structural change. We have by no means been immune to these challenges but I am confident we have a very strong platform from which to move forward. Continued investment in our London and Scottish offices, underpinned by our active role in Lex Mundi, the leading global network of independent law firms, remains at the heart of our strategy, which will allow us to support clients across domestic and international markets.’

MMS currently sees around a quarter of its income derived from London and plans further strategic growth, with a particular eye on its successful financial services practice.

For Brodies, meanwhile, since an 8% dip in revenue to £35.8m during 2009/10, the firm has grown its turnover by 45.6%; a compound annual growth rate of 12% over both the last three-year strategic period and the past decade.

Operating profits before partner distributions increased by 23% from £19.3m last year to £23.7m in 2013/14, a year that saw the firm take leases for new premises in Aberdeen and Glasgow, pushing up its costs by 6.2% to £28.4m.

The firm has also invested in outside talent, and in the 12 months to 30 April, the number of partners at Brodies rose from 75 to 80, boosted by seven lateral hires, including regulatory and competition lawyer Rod Lambert from Norton Rose Fulbright in London to its Edinburgh office and corporate lawyer Neil Burgess from DLA Piper in Glasgow. Over the same period, the number of lawyers and professional advisers at the firm increased from 326 to 348.

While some question whether this level of growth is sustainable in light of Brodies’ Scotland-centric focus, Bill Drummond, managing partner at Brodies, said: ‘Over the past year we have seen further sweeping changes in the Scottish legal market. However, this changing environment, and the slowly improving economic prospects present opportunities for Brodies and for our clients. We remain committed to our strategy of supporting clients within and from Scotland in all sectors that are fundamental to the continued success of the Scottish economy.

‘The improving UK economy and more stable conditions in the Eurozone have encouraged many clients to move forward with greater confidence in the long-awaited recovery and to invest in their businesses and ventures. This fed through into increased transactional activity for the firm, especially for our real estate, corporate M&A, energy and finance teams.’

Senior partners are largely feeling optimistic for the year ahead, although hanging over the recovery is the untold impact of the referendum on Scottish independence on business confidence and investment, with the summer months expected to see a slow down. However Shand said: ‘We have a lot of projects in the pipeline. At worst they will come about in the Autumn and we’re cautiously positive.’

Tom.moore@legalease.co.uk

Caroline.hill@legalease.co.uk