Legal firm that aims to be law unto itself

PROFESSOR Lorne Crerar, the affable head of Scots legal firm Harper Macleod, gives the impression he is not the greatest fan of accountancy-led tie-ups.

In recent years, a handful of legal heavyweights have decided to get into bed with the bean-counters, regarding such deals as a natural route to the one-stop shop approach.

Legal advice, auditing and professional services can be promoted under a single full-service branding, though the fall-out from the Enron and Andersen debacle may have put a damper on the pace of change.

Harper Macleod, which has 23 partners and a total of around 150 staff - placing it firmly in the mid-tier of the Scottish legal profession - has resisted the temptation to say "yes" to the accountants, or indeed other solicitors looking to merge, choosing to use the strength of its people as a catalyst for growth.

"Where’s the fun in being employed by an accountant?" Prof Crerar quips. "Yes, we’ve been approached by accountancy outfits, as well as large English legal firms, but why would we want to pass away the ability to determine our own future to someone based in London or Manchester? No thanks, that’s not for us."

He adds: "I’m not even sure that clients actually need law firms to be global."

Instead, the young firm - Harper Macleod was only formed at the beginning of the last decade - has focused on honing the talent of its own fee earners and support staff, highlighting a low staff turnover in a profession notorious for mass defections and the odd bit of poaching.

In the last five years, it claims to have lost just four lawyers to rival firms - quite an achievement in these competitive times.

Now, keen to bolster its presence in the Capital, where it opened a small operation at the tail end of 2001, Harper Macleod has decided to follow the trend set by a number of its peers by moving to larger premises later this month.

A townhouse in Melville Street, in the city’s West End, will provide spacious accommodation for the developing east coast practice and allow the firm to target additional work in this neck of the woods.

Prof Crerar says: "When we first came to Edinburgh, it was principally to service our Court of Session work, but then some of our clients who have east coast operations wanted us to do their work through here, and the operation grew from there.

"Traditionally, for many Glasgow firms, the natural thing was to say: ‘Let’s just be correspondent only’, but that didn’t feel right."

He adds: "We have committed ourselves to the new premises, not because we see there being a huge expansion in the Edinburgh market, but because of our commitment to support the people we have through here."

The firm sees growth coming from sectors it already has a strong reputation in, such as commercial property and employment law, but the move may also prompt increased activity in other fields like banking and corporate work.

Certainly, the four floors of the new Edinburgh HQ will provide the flexibility lacking in its current serviced unit in George Street. Melville Street will be home to four partners, and a total staff complement of about 20.

Property specialist Hilary Gordon joined the practice last year from Maclay Murray & Spens, in a rare senior "lateral hire" for Harper Macleod, with the advantage that she already knew her way round the Capital’s crowded marketplace.

"Hilary is very much an Edinburgh person," Prof Crerar says. "Culturally, I think it is a very different market, and hiring someone who has been brought up in the legal market in Edinburgh was a sensible thing for us to do."

A new assistant is due to join from city law firm Drummond Miller in July, and a couple of trainees will also transfer from Harper’s main Glasgow practice once the new office finds it feet.

But Prof Crerar makes it clear that the firm is "in no hurry" to take the Edinburgh operation on to the next level. He adds: "Our culture is really important to us and we try to grow and promote from within. When we do hire, we do so at quite a young level and encourage those people to develop with us."

Indicative of that approach is the average age of Harper Macleod’s partners, the most senior lawyers within the firm.

In a profession where gaining partnership status by your late-30s is no mean feat, at Harper the average partner is in their early to mid-30s.

The youthful outlook appears to be paying off for the firm, fuelling its recent stellar growth.

Within just two years, fee income has grown by a half, and even in the present economic climate, the practice has a near-20 per cent upturn in fees pencilled in for the current year, which would lift turnover to more than 6.4 million.

Prof Crerar notes the change that has taken place over the past 14 years. "When we started out, it was very hard to get people to work with us - they wanted to go with the big shots. Now I am receiving two or three calls a day from prospective employees.

"If we want to grow and foster the business, the people that work in the office are equally as important as our clients. We give our younger staff considerable responsibilities, and make sure they are better rewarded than they would be if they were with one of the top three legal firms."

Business Insider magazine’s latest annual law review shows Scotland’s leading players have been weathering the economic slowdown better than their corporate counterparts south of the Border.

The figures reveal that total staff numbers at nine of the top ten Scots legal firms increased from 2996 to 3243 in the past year, with overall partner numbers increasing from 347 to 375.

Against the report’s generally rosy picture, Harper Macleod’s managing partner is sticking to a more cautious line.

"The wind of recession is definitely here," notes Prof Crerar. "Although it is the case that other people’s problems can present opportunities for lawyers, the corporate market is generally quieter.

"We are seeing more applications from people in other firms wanting to join us, which is usually a symptom of uncertainty or lack of promotional opportunities. So I think things are a little bit stagnant, and not quite as good as they might first appear.

"If the legal market is growing, is that because there is more work around? The answer is probably no, so someone must be suffering, and I suspect many traditional high street firms are losing out on high volume work."

However, Harper Macleod has positioned itself as the leading player in the Scottish housing transfer market, having played a key role in transactions involving local authoriries and housing associations in Glasgow, Dumfries and Galloway and the Borders.

Prof Crerar sees the burgeoning sector as another reason for having a greater foothold in the Capital. "There are a few firms in Scotland that have housing associations as a traditional part of their client base, but we are now accepted as the premier firm on the transfer front.

"A lot of practices are trying to get into the market now as they see it providing a great opportunity."

A European player

ALTHOUGH it has spurned the notion of a marriage with an accountancy firm, Harper Macleod has been a key member of the European Legal Alliance for just over a year now.

From April 1, 2002, the Scots practice has operated on an exclusive basis alongside London firm Field Fisher Waterhouse (FFW) - which has three times as many partners as Harper - Beauchamps of Ireland, Germany’s Buse Herberer Fromm and Dubarry le Douarin Veil, a medium-sized firm based in Paris.

Although the five worked together for a number of years, last spring’s launch resulted in many clients involved in cross-border transactions being managed by a single partner and receiving a single bill.

Now, after a year together, the group is likely to be joined by legal hotshots in Italy and Spain.

Professor Lorne Crerar is adamant his firm will play a key role as one of the alliance’s founding parties.

"FFW are by far the biggest firm and their focus is clearly on expanding the European network, but the alliance is certainly not dominated by them. A natural progression would be a full merger, but if that does happen it will be quite a long way down the road."

Harper Macleod is best known in the legal fraternity for its headline-grabbing sports work, acting for the likes of Celtic manager Martin O’Neill and the Scottish Premier League.

"As a growing firm, it created an enormous amount of interest in us," says Prof Crerar. "Sport is one of the areas where we see there being a big opportunity outwith Scotland."