Patrick Andrews sees more mergers in legal sector

The practice, which was last year usurped by Brodies as Scotland's fourth largest law firm, is due to report profits rose a 16 per cent to 13.1 million in the year to end-April, against 11.3m last time.

Although chief executive Patrick Andrews described trading conditions as "challenging", the firm advised on several major corporate deals including the 6 billion sale of Cairn Energy's Indian assets to mining heavyweight Vedanta Resources.

It also acted for Arcus Infrastructure Partners when it swooped on Forth Ports earlier this year. Overall, the corporate finance team worked on 60 deals with a combined deal in excess of 8bn.

Andrews said market conditions have remain difficult since the start of the latest financial year but the firm is continuing to grow its UK business and work overseas.

"The market in the last three years has been extremely challenging and it will continue to be challenging going forward," he told Scotland on Sunday. "It's a bit like mountaineering, you get to the top and enjoy the view for a short spell and then you are facing the challenge of the next hill."

Turnover last year rose 6 per cent to 37.3m. Andrews was unable to provide a figure for average profits per partner as he said the accounts, which are yet to be filed at Companies House, were still being examined by auditors.

Brodies, which is based solely in Scotland, is yet to publish its latest annual figures but it last year pipped Shepherd and Wedderburn to the number four spot when it achieved revenues of 35.8m compared to the latter's 35.3m turnover.

McGrigors, Scotland's largest law firm by turnover, this month posted annual revenues of 65.6m, up 10 per cent on the previous 12 months. Profits grew 8 per cent to 17.2m in the year to 30 September.

Talk of consolidation in the Scottish legal sector has intensified in recent weeks after Anderson Strathern merged with Bell & Scott, the Edinburgh firm specialising in commercial property.

Andrews said he expected changes north and south of the Border to continue. "There are too many law firms chasing the work in both Scotland the rest of the UK," he said."I have no doubt we will see a really fundamental shift in the nature of the market."

Asked whether Shepherd and Wedderburn would take advantage of merger or acquisitions opportunities, Andrews said: "We are very much focused on sticking to what we do well and promoting the quality of the work we do and the knowledge we have in particular sectors."

But he added: "If there are opportunities that are aligned to that then they are opportunities we will explore."

Shepherd and Wedderburn has a workforce of 408 across its offices in Edinburgh, Glasgow, London and Aberdeen.