Partners feel the pinch as profits likely to drop 27% at Maclay

Published on Friday 24 July 2009 21:20

PARTNERS at one of Scotland's "big four" law firms are braced for a sharp fall in profits as the recession continues to wreak havoc in the profession.

Fee income at Maclay Murray & Spens fell by 8.4 per cent to 55.4 million in the year to the end of May.

Maclay's accounts are still subject to audit, but the firm expects a 27 per cent slump in profits to about 13.5m.

Profit per equity partner is predicted to fall by about 32 per cent to 220,000, while average profit per partner is forecast to fall by 30 per cent to about 180,000.

Maclay said the lower profit-share figures reflected an increase in the size of the membership of its limited liability partnership as well as the fall in the headline profit.

Chief executive Magnus Swanson said: "Whilst these figures are disappointing, they are not surprising given the current economic climate and they appear to be in line with most law firm results this year.

"Whilst the recession has impacted adversely on some areas of our business, others have been very busy and the outcome overall is consistent with our expectations in what has been a challenging year."

Maclays – which has offices in Aberdeen, Edinburgh, Glasgow and London – laid off 38 members of staff in April, reducing its headcount to 529.

Swanson added: "Earlier in the year we took significant steps to control costs and capacity and believe that we are now well placed to meet client demands as the economic situation hopefully improves."

It emerged yesterday that staff at rival Dundas & Wilson have voted in favour of a 10 per cent pay cut in order to save jobs.

Some 98 per cent of lawyers and support staff at the firm voted in favour of the plan to reduce pay by 10 per cent between September and April and take an additional 18 days unpaid leave.

Partners at D&W put forward the proposal to avoid a second wave of job losses, having made 43 posts redundant across its Edinburgh, Glasgow and London offices in February.

Managing partner Alan Campbell said: "This action is necessary to protect jobs and the talent we have built up, while transactional activity remains depressed by the current economic situation.

"We have to balance revenue against expense, but this was very much our preferred course of action."

News of the overwhelming support for the plan came just days after D&W unveiled a 12 per cent slump in revenue to 66m in the year to the end of April.

Profit per equity partner fell from 385,000 in 2007-8 to 308,000 in 2008-9.

In March, rival McGrigors posted a 2.5 per cent rise in revenue to 62.5m, with profit per partner flat at 300,000.