FIFTEEN years after being warned he was committing “financial suicide” by leaving Dundas & Wilson to launch a separate private client law firm, Douglas Connell takes no little satisfaction in proving his doubters wrong.
However, he believes there is still “a long way to go” at Turcan Connell, the firm he set up with former D&W colleague Robert Turcan.
The two decided to go it alone when accountant Arthur Andersen began its merger talks with D&W in 1997, as questions were raised over how private clients would fit into the business.
“We were able to negotiate a management buy-out of the private client business, and that happened in August 1997” says Connell, joint senior partner at the firm.
“We realised we needed a certain amount of scale, because it’s not sustainable to have a relatively small business, so quite soon after that we were joined by like-minded lawyers.”
Turcan Connell now has 21 partners and around 300 staff across offices in Edinburgh, Guernsey and London – with its a Glasgow office to open soon.
With a focus on family law, charities and investments, several of Connell’s former colleagues were certain the firm would be absorbed by a larger entity within a few years because they were sceptical about the prospects for a business dedicated to private client work.
Speaking at the firm’s office in Edinburgh, Connell says: “One or two of them told me I was committing financial suicide by setting up a private client law business. We’ve proved them wrong and we’re pleased about that.
“I’ve had a terrific 15 years – it’s been the most satisfying period in my professional life. Creating and building something is very satisfying.”
He says the firm is eight times the size it was back in 1997 and is aiming to ensure continued growth by developing the next generation of lawyers and other advisers within the business, which is carving a niche in the renewable energy sector and manages £700 million of funds at its wealth management arm.
Despite its focus on families and a determination to develop the next generation, Connell insists that he does not see the firm itself as a family.
“I see it as a group of professionals working very closely together. It may take a long time to become experienced in all our professional areas, but certainly in private client work it takes a long time to be taken seriously as an individual.”
One of the consequences of the financial crisis, Connell believes, is that grey hair and experience are very much in demand. “People are looking for seasoned advice,” he says.
The tough environment has also seen a number of high-profile mergers and acquisitions across Scotland’s legal sector, but Connell says the “merger fever” has not spread to his firm.
In June, Biggart Baillie announced plans to merge with English business law firm DWF, just days after Edinburgh-based McKay Norwell was taken over by Dundee firm Blackadders. In addition, Glasgow-based McGrigors has teamed up with Pinsent Masons and Lindsays with Shield & Kyd.
“Turcan Connell is one of relatively few Scottish law firms that isn’t considering any form of merger, being taken over by an English firm or being absorbed into an international practice,” Connell insists.
“We’ve carefully built up our business and our brand over these last 15 years and we’re determined that we won’t do anything to damage or dilute it by hopping into bed with another firm which might not share our culture.”
Aside from rampant consolidation, the largest shake-up on the horizon for Scotland’s law firms is the impending introduction of “alternative business structures” (ABS), which will allow non-solicitors to own law firms, in effect opening up the market to allow other companies to offer legal services. The measures were dubbed the “Tesco law” when they were introduced south of the Border because supermarkets and other large businesses were expected to start selling advice, but Connell says Co-operative Legal Services is mounting a direct challenge to conventional high street solicitors by announcing plans to create 3,000 legal services jobs.
Although the legislative framework allowing ABS in Scotland is in place, it may be another six months before the regulatory structure comes into operation.
Connell says the delay has been “frustrating” because he is keen to enable non-solicitors at the firm to become equity partners.
“We’re not looking for third-party equity, we want the opportunity to treat our senior colleagues fairly,” he explains.
“We’re not worried about being the first, but we intend to be at the forefront of the changes.”
Connell believes the new structure could be the “key to survival” for small law firms outside Scotland’s cities which would be able to team up with accountants and pension advisers to give an integrated service to clients.
In the meantime, along with preparing a modest celebration to mark the firm’s 15th birthday, Connell is overseeing the finishing touches to the new office in Glasgow.
Before going ahead, Connell says the firm spoke to “several hundred people” to make sure it was the right decision, and found there was clear demand for its services in the west of Scotland.
With offices in London and Guernsey, the firm is taking a keen interest in the independence debate, because its clients are asking for advice on tax matters.
Regardless of what happens in the referendum, he says the Scotland Act 2012 has the potential to create “great complexities” for taxpayers based in Scotland because the legislation will introduce a Scottish rate of income tax from 2016.
But he says the firm does not “and will not” take a position on the debate because it has clients across the whole spectrum of political views.
Despite the opportunities to expand through acquisitions, he says the firm has never seen itself as a “consolidator of other businesses” and is instead determined to grow gradually and organically.
“That’s largely due to our culture, and acquiring other businesses can mean acquiring a lot of baggage,” he says.
“What I think will happen in terms of the growth of this business is very selective acquisition of individuals and teams.
“There’s a lot of change happening, and a lot of negativity about, but I’m very positive about the future.”
Born: Callander in Perthshire.
Education: McLaren High School in Callander; then University of Edinburgh.
First job: Running a B&B, to the surprise of my parents when they returned from holiday.
Ambition while at school: I was inspired to become a lawyer when I went to a careers evening at school. I was invited back to do a prize giving at the school and told the students that if they get a chance they should grab it. Several of them came up to me that evening to ask about getting work experience in the office. Encouraging the next generation is hugely important.
Kindle or book? I was the chairman of the Edinburgh Book Festival and I consume literature in all forms. That includes audio books, written and electronic material.
Best thing about your job: Being trusted by all kinds of people to give advice which goes beyond pure legal technicalities and seems to make a real difference to them.
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