Burness Paull has felt the effect of economic and political uncertainty more than most this year, reporting muted growth and an 8% drop in profit as two of its biggest markets struggled.
Revenue at the Scottish independent was up a sluggish 2% to £58.5m for the 2018/19 financial year, while profit fell to £22m from £23.8m. Two of the firm’s biggest markets – oil and gas and commercial property – had a slow first six months, heavily weighing on the result.
Chair Peter Lawson (pictured) told Legal Business Brexit and a stabilising of the oil price meant some investment decisions had taken longer than anticipated, impacting activity. While the first half of the financial year had been quiet, the second half had picked up significantly, he said.
‘We’re talking about small margins here but it’s meant our growth has been less than expected,’ he commented. ‘Our large real estate team was also impacted, and that’s been Brexit-related. That will be across the market. Clients have been up front with us in terms of saying they’re just holding off investment until the whole situation is clarified.’
Conversely, Lawson said the corporate finance team had its busiest year ever working on private equity, capital markets and owner-managed M&A deals. Pensions, food and drink and private capital had also had successful years. The firm’s revenue is up 26% over the last five years.
The firm decided to undertake a client review during the year, from which it has been investing in new technology such as cloud computing, document automation and practice management systems. Its headcount had increased by 9%, driven largely by the employment of legal technologists and paralegals to support its approach to technology. A review of its rewards and remuneration structure was on the agenda for this year, too.
He was optimistic about the next year, anticipating further improvement in investment levels once there was more political and economic clarity.
‘Clients are making it very, very clear to us that they’re weathering their own challenges,’ Lawson told Legal Business. ‘It’s about being more efficient in the way we can be giving them our services, and not just in relation to fees, but crispness of advice and working in a way that works for them.’
‘The client care project has been the biggest project across the firm this last year. It’s been a painstaking process but fantastic, you know what the client wants. Lawyers can sometimes be a bit presumptuous because that’s just always the way we’ve done it.’
Fellow Scottish independent Brodies earlier this year reported a strong set of results, with revenue and profit up by double-digit percentages to £76.9m and £37.4m respectively. Revenue at Shepherd and Wedderburn, meanwhile, rose 4% to £55.7m and profits were up by the same percentage to £22.8m.