Burness Paull, the Scottish legal heavyweight employing some 500 staff across its three offices, has seen Brexit uncertainties take a bite out of its annual profits.
Draft results for the 59-partner firm, released today, reveal a steady rise in turnover, up 3.9 per cent to £53.3 million in the year to the end of July.
If our financial year had ended on 30 April it would have looked a bit differentPhilip Rodney
However, headline profit fell by 3.4 per cent to £22.6m as the pre-vote concerns and immediate aftermath of the shock 23 June decision to quit the European Union led to a “significant pause in activity and client instructions”.
Chairman Philip Rodney described 2015/16 as a “year of consolidation” for the firm after a growth spurt over the previous three years following the step-change merger between Burness and Aberdonian legal stalwart Paull & Williamsons which created the present structure.
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The latest figures were also skewed by the firm’s financial year running until the end of July, and not April, like the majority of its peer group.
“If our financial year had ended on 30 April it would have looked a bit different,” Rodney told The Scotman. “Those last two months were impacted by the uncertainties of Brexit and the shock of the result.
“That has resulted in a profit figure that was lower than expected, but we always thought that 2015/16 was going to be a year of consolidation.”
That dip in gross earnings is likely to translate into a reduction in profit share per partner and bonus levels but Rodney stressed that they would still be “very healthy alongside our competitors”.
The firm, which operates out of the key locations of Aberdeen, Edinburgh and Glasgow, also highlighted strong profit margins of more than 40 per cent, with a number of deal successes providing a solid base for the current year.
According to rankings published earlier this year, Burness Paull advised on 183 corporate transactions in 2015 which were worth more than £17 billion, putting it ahead of its nearest Scottish-based rivals.
International work, which now accounts for nearly 40 per cent of annual turnover, has created a number of “real opportunities” particularly in the US, Canada, China and Norway, the firm added.
It said the focus for the practice going into the new financial year was to facilitate further growth and create efficiencies.
“It may take a while before Article 50 is triggered and business goes on,” observed Rodney. “You just have to be pragmatic and there is a sense that things are starting to return to some sense of normality.”
Asked if the possibility of a second referendum on Scottish independence presented a further headache, the chairman replied: “I don’t think that is what is concerning out clients. We have to explore every avenue to find the correct way forward for Scotland. There will be dead-ends and u-turns along the way but business is taking it step by step.”