There is a “definite perception of lawyers and law – everybody knows what I mean when I say that,” says Glen Gilson, managing partner at Gilson Gray. “It’s kind of an unsaid thing in the profession… the consumer has found law an impenetrable, rather aloof product for decades, if not hundreds of years.”
Since its launch to much fanfare in 2014, Gilson’s company has vowed to shake up this sector, which is anchored too deeply in tradition and failing to modernise.
“The basic premise of starting Gilson Gray was to effectively be a disruptor brand in the market, providing an alternative, frankly more cost-effective and more humanised legal product.”
He describes the firm as more akin to a combination of private equity business, law firm and nightclub than its more traditional peers. The business is “very high energy, it’s very youthful in mentality – there’s an ambition and entrepreneurialism that underpins everything that we do”, he says.
Such an approach could be seen as gimmicky soundbite, if the solid record of achievement didn’t prove otherwise, as Gilson Gray has secured clients such as KPMG and Cala Homes, gained Legal 500 recognition, and expanded its Edinburgh and Glasgow offices.
It has also embarked on a prolonged recruitment spree, which includes poaching the entire commercial dispute resolution team from Morisons Solicitors, and hiring from established names such as Brodies, Aberdein Considine and Harper McLeod.
Such activity is set against a backdrop of a Scottish law sector that has consolidated considerably, including Dundas & Wilson merging with CMS, Maclay Murray & Spens teaming up with Dentons and Addleshaw Goddard uniting with HBJ Gateley. In each case the Scottish firm took on the name of the other party.
HBJ played a key role in the career of Gilson. After training at Turcan Connell, Gilson had been planning to go to the bar. But his family business got into difficulty, so he helped with what proved to be a successful turnaround and disposal of the aviation-focused firm, drafting in what was then HBJ on the legal side.
HBJ offered him the chance to start its private client operation, which he says became the largest part of its activity within 18 months. He took a key role in mergers and growth activity that vastly increased the firm’s turnover and headcount. But he admits that reaching such seniority so young was due more to determination than talent.
“And it’s the same with this firm. Many people said we couldn’t do it, but you can, even in a sector that’s as traditional and as difficult as law… you can create real, quick commercial growth.”
The creation of Gilson Gray came about after he became restless while at HBJ. “I just didn’t believe that the way in which we were conducting that business was right.”
Gilson cites a big gap between the staff and the partnership, the clients and the service, an issue he says is prevalent in the sector. “Law firms have tended to be rather unhappy places – partners have obviously been in pursuit of profit per equity partner and fundamentally the financial model, in my opinion, for law is broken.”
Margins are being increasingly squeezed and in some cases fees increased, he adds. PwC revealed in its Annual Law Firms’ Survey 2017 that the top ten firms’ average profit per equity partner fell by 2.3 per cent to just over £1 million, while this year has seen fees jump by an average of 3 per cent. Additionally, a quarter of firms reported a drop in both fee income and profits.
“Culturally and economically, it’s been a challenge for the legal profession over the course of the past decade – a significant challenge – and I felt that we could do things differently.”
He felt that starting with a blank canvas was the best way to define the culture and create something truly disruptive. This was instead of taking up one of the offers he had for managing partner roles, which came with “a list of things I wasn’t allowed to do – and I just didn’t fancy that”.
Gilson describes himself as an outlier in terms of the average lawyer, more of a “commercial streetwise operator” rather than being academically minded. “You cannot have a successful law firm without both.”
|While evidently not a man lacking confidence, he admits to some trepidation when launching the firm.
“I wasn’t quite sure how much scale we’d be able to achieve from the get-go,” or whether Gilson Gray would ever become more than “a couple of guys above a chip shop”.
Gilson teamed up with Matthew Gray, former head of property and legal services and member of the managing board at Pagan Osborne, who took the reins as MD of Gilson Gray Property Services.
Three years later, Gilson’s gamble has been vindicated. “We ported 4,000 clients in the first quarter, we went into profitability in the first three months, which is really unheard of for a new-start professional services business,” he says. “We very quickly got off to a strong start and over the last three years, organically we’ve been the fastest-growing law firm in Scotland both in terms of scale and profitability… There’s been an embarrassment of awards.”
These include a sweep at the ACQ5 Awards earlier this year, triumphing in categories such as Full Service Law Firm of the Year in Scotland.
One key focus has been controlling costs, while the firm covers financial services as well as property and legal.
“We have a group structure that allows us to have annuity income – our financial services business is now one of the largest in Scotland,” says Gilson. “So we’re able to have a true business model that supplements profitability and maintains financial strength. We can actually make nigh-on double what your average large law firm makes in terms of margin.”
And law firms can no longer rely on brand, he asserts. “No-one’s done what we’ve done before – it’s a total novelty in the sector.”
Gilson says he decided at the age of three that he wanted to become a lawyer to follow in a family member’s footsteps. And despite being told at school that he wouldn’t cut it as a lawyer, he became one of the fastest promoted in the UK.
He had an itinerant upbringing because of his father’s career in aviation, with Gilson senior having been the youngest captain in British civil aviation history and behind the launch of Chieftain Airways in the early 1980s.
This encouraged his son to aim high. “I didn’t really see much limitation on ambition.”
But he does admit to some headwinds for Gilson Gray, notably political uncertainty. A study published last year reported that 82 per cent of partners expected law firms to lay off staff in the UK in the wake of the Brexit vote.
“We pretty much launched in one of the most politically uncertain climates in the UK’s modern history, so that’s been a challenge,” says Gilson.
But he sees a major opportunity amid the chaos. The business now has 130 staff, with 20-odd partners, and Gilson intends to grow the business by about 50 people over the next year.
The firm acted for Liberal Democrat MP and former Scottish Secretary Alistair Carmichael, who faced losing his parliamentary seat, after the first election petition in Scotland for 50 years. Celebrating the victory in December 2015, Gilson at the time said the case was “one of the most significant Scottish litigations in recent history”.
And he says Gilson Gray is one of the few Scottish law firms “of scale” left in Scotland. “The truth of the matter is that while there are some strategic merits in cross-jurisdictional footprint, Scottish law firms do not naturally seek out a takeover parent if they are happy with their financial position – that is the fact of the matter.”
He adds: “We have a sector in difficulty, an uncertain time of consolidation, but it’s actually an opportunity for us.”
The firm has seen growth outstrip the rest of sector in the last three years. “And long may it continue – but it’s not easy.”