CAFE Royal in Edinburgh. It’s an early lunch and Kirk Murdoch is enjoying a pint of EPA. He may be one of Scotland’s top lawyers, but he feels right at home in a pub.
That’s because he grew up in one – he spent his childhood years among the farming and mining folk in the Hollybush Inn, the focal point of an east Ayrshire hamlet.
“I remember the political debate, the smoke-filled rooms, the dominoes and darts,” he says fondly. They were happy days – even the times when he was called upon by his parents to help out shovelling the you-know-what after the local hunt had passed through. “I have been shovelling it ever since,” he jokes.
Well, not quite. His brother remains in the trade as a hotelier, but Kirk Murdoch always harboured hopes of becoming a lawyer and after studying at Edinburgh University he was enrolled by McGrigor Donald. He has been with the firm in its various guises ever since.
Last year marked another milestone when McGrigors – as it became known in 2004 after its aborted K-Legal tie-up with accountancy firm KPMG – merged with Pinsent Masons. Twelve months on and Murdoch, who is now the firm’s Scotland and Northern Ireland chairman, says there has been a sea-change in performance with the newly-combined group achieving the sort of benefits it had intended from the deal.
Revenue, unveiled today, is up 5 per cent to £309 million and offices have been opened in Istanbul, Munich and Paris. The firm has doubled the size of its Shanghai team and now has more offices overseas than in the UK. A number of senior appointments included restructuring expert Claire Massie from Dundas & Wilson whom, he says, would not have joined the smaller firm.
Murdoch is delighted with the expansion, though he gets irritated at suggestions that the firm is no longer committed to Scotland, a view fuelled partly by dropping the McGrigors name in favour of that of the parent company.
“It was a big consideration,” he says. “A lot of us had worked with the McGrigors brand for a long time. But it was really only important in the Central Belt, it didn’t have the same affiliation elsewhere. Pinsent Masons was miles stronger than our [brand] internationally. It was emotionally challenging, but I knew it was the right thing to do. A lot of great Scottish names have disappeared – Whinney Murray, Thomson McLintock.”
The reason for the merger was essentially driven by a need to grow the business and respond to changes in the legal market: “You need to follow the clients and they were growing internationally, while demanding more for less.”
A number of corporates were reducing their legal panels and requiring one-stop providers, but McGrigors as it stood was not of a scale to maintain those relationships.
“It made us review our options and either become niche and boutique – which didn’t really fit the business model – or become bigger by finding a partner. We looked for an organisation with a strong London presence.”
The firm already had 200 staff in London, but Murdoch admits that it was difficult to break into the market. “We were still seen as a Scottish law firm with a London office,” he says.
He knew a few of the Pinsent Masons partners and some former McGrigors staff who worked there. There were cultural similarities and both firms had regional backgrounds.
The last year has been challenging for the profession, with many firms laying off staff or undergoing their own mergers, but Pinsent Masons has avoided the need to lose people and now has 600 staff in Scotland out of 2,500 in total.
“One thing that annoys me is when our competitors say we are not committed to Scotland,” says Murdoch. “By coming together we now have 100 more people here. Those who know about our business understand we are Scottish.
“The merger justifies the strategy because we can provide something unique in Scotland. I am finding more clients who were probably out of reach to us at McGrigors; clients who would not have shown any interest in us are now talking to us.”
The firm now handles five of the six biggest listed Scottish firms. Pre-merger, it did work for one. It is now the biggest law firm in Scotland in terms of lawyers and employees and has managed to retain a number of key clients who may have been lost without the merger. During the past year, it has worked on deals for Cala Homes, the Forth Replacement Crossing and Rangers Football Club.
It has also launched Vario, a hub to provide lawyers to clients on a contract basis, and Cerico, a joint venture with IT consultancy Campbell Nash to help large companies meet global compliance requirements. But work is slower as fewer transactions have taken place and clients continue to pursue the “more for less” agenda.
This puts pressure on fees. They may not be lower, but clients will spend less overall, he says. It means law firms need to step up their monitoring of costs.
“It is a low-growth economy and competition is strong,” concedes Murdoch. “There are a lot of lawyers trying to do the same thing. I am not seeing any green shoots, although sentiment is improving and I am confident we can make progress.”
With that, he ordered a second pint.