Legal Review: Mergers make sense as law firms expand their horizons

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Anna Dove looks at the past 12 months for Scotland’s legal sector for The Scotsman’s Scottish Legal Review 2017

Strength and stability are key to the success of a legal firm and a busy 12 months of mergers has seen a number of big players bolster their teams through consolidation as they look to grow in both size and expertise.

CMS’s triple merger with creative law firm Olswang and property experts Nabarro went live in May in what was the UK’s biggest ever legal merger.

The result of the consolidation is a City powerhouse operating under the name CMS Cameron McKenna Nabarro Olswang. Together, the trio have formed the world’s sixth-largest law firm by lawyer headcount and the sixth-largest in the UK by revenue.

“While it didn’t directly touch on our practice in Scotland in terms of new people in our Scottish offices, the merger is having a very positive impact here,” says Caryn Penley, managing director of CMS Scotland.

“The newly expanded firm has a reinvigorated focus on key specialist sectors, all of which are relevant to Scotland’s economic focus.

“They include energy, financial services, infrastructure and project finance, life sciences and healthcare, real estate, technology, and media and telecommunications.”

Penley says a number of natural synergies have also been created through the merger, which position the firm very strongly in cutting edge sectors such as fintech and energy tech, where there is a growing demand for legal expertise in Scotland.

“We see a real benefit from clients from all this – they will continue to get hands-on support from their existing lawyers which is augmented with additional sector expertise through the expanded team across the UK and beyond.

“Since the 2014 combination between CMS and Dundas & Wilson, we’ve been investing in Scottish-based operations, recruiting new colleagues and upgrading our office space in Glasgow and now in Edinburgh.

“This latest merger gives us increased strength and depth as our investment continues and enables us to offer further opportunities for Scottish-based colleagues to use their expertise in international deals.”

The Scottish legal market is no stranger to mergers.

DWF’s merger with Belfast commercial law firm C&H Jefferson was effective from 
1 December, 2016. DWF has two offices in Scotland, in Edinburgh and Glasgow.

Shepherd & Wedderburn acquired an Aberdeen business law firm, the Commercial Law Practice, in November 2016 with the deal completing on 1 January this year and all 11 CLP staff transferring to Shepherd & Wedderburn.

The acquisition was a move by Shepherd & Wedderburn to strengthen its footprint in the north-east.

Following talks of a merger between Morton Fraser and MacRoberts last year, the proposed union was called off in January.

Had the merger gone ahead, it would have created the sixth-largest Scottish independent law firm, behind Brodies, Burness Paull, Shepherd & Wedderburn, Maclay Murray & Spens and Dickson Minto.

WJM expanded by merging with BMK Wilson in May, with the practice still known as Wright, Johnston & Mackenzie in Glasgow and Wright, Johnston & Mackenzie incorporating Barty’s in Dunblane.

The arrangement formed part of WJM’s plan to strengthen and grow the key areas of private client, commercial property, corporate and dispute resolution.

“The merger with BMK Wilson has strengthened our private client and commercial property practice areas and has provided us with a highly experienced team in Dunblane,” says Fraser Gillies, managing partner at WJM.

“We’re already seeing the benefits of the merger with BMK with the high-quality clients and work they’ve brought to the firm.” In September, WJM announced it was further expanding its client base in the north of Scotland as a result of a renewed connection with Robertson & Co.

Robertson & Co closed at the end of September following the retiral of the firm’s sole partner, Keith Robertson, after 45 years in the legal profession.

“It has been our ambition to grow the firm through both acquisition and organic growth,” says Gillies.

“These recent acquisitions mean we have been able to consolidate our position in the sectors where we’ve carved out an excellent reputation, providing our clients, their businesses and their families with a first-class relationship-based model of client service, underpinned by a deep technical expertise in our areas of specialism.

“Our commitment is to remain an independent Scottish-owned and managed firm with clear strategic direction.”

The merger between international law firm Addleshaw Goddard and Scottish practice HBJ Gateley completed on 1 June.

The aim of that consolidation was to deliver stronger UK-wide client and sector offerings in response to increasing client demand for advisers with a capability both in Scotland and south of the Border.

On a bittersweet note, Pagan Osborne went into administration on 1 September, triggering a 45-day consultation period as the historic firm was snapped up by Thorntons Law for an undisclosed sum.

Dundee-based Thorntons said it planned to save about 50 jobs, putting around 70 staff at 
Fife-based Pagan Osborne at risk of redundancy.

Thorntons acquired the assets, goodwill and work-in-progress of Pagan Osborne on the same day Tom MacLennan and Iain Fraser, partners with FRP Advisory, were appointed joint administrators of what was one of Scotland’s oldest law firms.

Looking ahead, the trend towards consolidation is set to continue with the merger of Maclay, Murray & Spens (MMS) and Dentons expected to complete later this year following approval by the partnerships of both companies.

Dentons employs more than 8,000 lawyers across more than 60 countries, while MMS is notable for being Scotland’s first commercial law practice, having been founded in Glasgow in 1871.