Alan D Stalker: Why look to the furthest shores when north shore will do for outsourcing?

Published on 28/07/2011 13:26

For better or for worse, Scotland is too small to sustain a client bank for every firm of solicitors and every firm of accountants, particularly in the commercial or business spheres.?

Most professionals reading this will, at one point, have had experience of a good client selling up, and it is all too often a business based in England that makes the acquisition.

That is the nature of business. The small fish grow and grow, then come to the notice of the bigger fish who snap them up.

The fact of natural consolidation in the market shouldn't, however, mean that all we northern types can do is tend these growing businesses until the profit inevitably migrates elsewhere.

Consider two potential targets. Firstly, the businesses based elsewhere that have done the consolidation. While most Scottish professional firms don't want, and couldn't service, all the needs of the mighty listed company or other "foreign" behemoth that has done the snapping-up, we can do all of the mainstream transactional and advisory work. Secondly, those professional firms which can advise the behemoths on the tricky stuff will not be allowed to charge "London rates" by their clients in this market for the more day-to-day work.

They could send this work offshore. At first this was just secretarial work but, increasingly, the work of qualified staff is being transferred. This makes sense. After all, for many practices there is little contact between a client and anyone other than a partner, so does it make a difference to the client if the assistant working on their transactions is pulling an all-nighter in London, or has simply gone into their office for 9am in India or China? Why offshore, though?

Why not north shore? Scotland always had a reputation for financial probity, and the regulations of our professionals is, if anything, stronger here than elsewhere. The Scottish cost base is lower, and our firms typically smaller. Our reputation, fees, size and inherent flexibility, make our firms better placed to react.

Scotland, moreover, has greater advantages over any other country. We are in the same time zone, and speak the same language, have similar insurance requirements and substantially similar professional rules. And let's not forget, many of the clients consuming these services were once our clients, at least in part. Rather than bemoaning the loss of our clients, perhaps it is time to notice that we have a great opportunity to build upon Brand Scotland as exporters of professionals services? How can that be a bad thing?

• Alan D Stalker is a partner with Glasgow and Dunfermline-based business lawyers Young & Partners LLP