Masters of the long game

THERE are two things that all legal firms seem to want to talk about at the moment – firstly, how much they value their long-term clients, and secondly, renewable energy.

Some senior lawyers repeat the mantra ‘It’s all about the clients and understanding their needs’ as if it was some kind of bright, shiny, new idea that didn’t exist when the money was rolling in.

Ian Turnbull is not one of those lawyers. The managing partner at Gillespie Macandrew has more justification than most to claim long-term relationships really matter.

“We have some great long-term relationships,” says Turnbull. “It’s about keeping that going and never taking it for granted. We’ve had some landed estates as clients for a century or more; we have acted for the Hopetoun family for a very long time.”

And as for renewable energy, Gillespie Macandrew is no Johnny-come-lately: “I think we can lay claim to be among the first law firms involved in renewable energy as we acted for the British Aluminium Company when it built the first hydro schemes to power its smelting plants early in the last century – Blackwater Reservoir in Kinlochleven in 1909 and Lochaber in 1929.”

Energy is still a key sector for the firm; in the modern era, it has grown from rural landowner clients putting up wind farms. Now the focus is shifting again, Turnbull explains: “There is a limited number of wind farms going to be built onshore – so do we stick at that or look at infrastructure, offshore wind and contracts? That’s what we are now looking at.”

Turnbull is very much an advocate of playing to your strengths. Gillespie Macandrew’s strengths lie generically in property, private client work and services to business and charities – and, very specifically, in land and rural business.

The firm’s last set of results, published at the start of September, showed it piloting a steady course through choppy waters.

“I think the 2010-11 results were very good and looking at our competitors [GM is a mid-sized firm with 22 partners] I think we can be very, very pleased,” says Turnbull. Turnover was up 2 per cent at just under £9 million, with profits flat at £2.7 million, and he describes the results, accurately and without fanfare, as “solid”.

Turnbull ascribes this solidity to taking decisive action when the economic crisis hit: “2009 was one of those years you just had to get through – there was much less activity. We got through it but spent some time focusing on our strategy.”

This led to an understanding of the sectors where the firm had real strength in depth – and where it could genuinely add value. Turnbull says this was very much driven by clients: “They are becoming increasingly demanding. There is obviously pressure on cost – we are in a competitive marketplace. As clients question your price, you have to demonstrate how to give them more – and be more imaginative about how you deliver.

“Ultimately, the client has to value what you are doing. Ask ‘Is this important to the client?’ If you get that right, you come away with a contented client who believes you have solved their problem.” He adds: “Anyone can deliver a basic service like a property transaction; where you add value is understanding a client’s business and their sector – and understanding where they come from.”

Turnbull accepts the legal market in Scotland in 2011 is pretty flat: “We are seeing a little bit more activity, but I don’t see next year bringing very much more. There will be big challenges for everyone, as traditional city-centre firms are pushed hard, and the rural market too. You have to offer a brilliant ordinary service – and something else on top to move forward.”

One area not moving forward with GM is the firm’s investment management operation, which was last month acquired by private bank Brown Shipley. Charles Fotheringham, head of the GM team, will join Brown Shipley as private client director – and his three colleagues are moving with him. Turnbull insists the team was working well – so why did he do the deal?

“We asked what our clients were looking for in the long-term – and what we would have to do to deliver that. We could see client demands in terms of being able to access their portfolios online – and there were areas where we could not make the level of investment needed. The regulatory burden was a factor too.”

In the end, Turnbull concluded that a firm of Gillespie Macandrew’s size could not make the great leap forwards needed to service clients in this area in a completely effective way: “In this light we felt our clients were best served being part of a larger organisation, where investment management is at the core and which has the resources to invest in world-class investment research. We took time to select who we were going to work with; I think Brown Shipley was right.”

Brown Shipley will manage more than £250m of funds from Edinburgh and Turnbull says the decision has “gone down pretty well with clients” who understand the rationale behind the move.

“We are still offering legal services – and a good interface with the investment advice from Brown Shipley. Clients are getting a better service at a higher level from a specialist operator – and being served by the same individuals because the team has moved over, so personal relationships are maintained.”

Turnbull adds: “It was a big business decision – but fundamentally we are lawyers, so we focused on our core business. We are now able to invest in the core legal business because we have things to do there.”

It wasn’t the first big business decision Turnbull has taken – and his track record has been pretty good. He had been at the helm since 1996 when, around 2004, he and his colleagues realised Gillespie Macandrew had to change: “We were a contented eight- partner firm and decided we would not survive in that form or be able to deliver the services we wanted to clients in future.” After that analysis, the “big bang” of a merger with a similar-sized legal firm was rejected and, instead, it picked off Bennett & Robertson, and some partners from Menzies Dougal and Hunters estate agency, bringing the hugely experienced and respected Wilson Hunter on board and taking the firm to a new level.

“I wouldn’t want to look back,” says Turnbull. “Firms that have stayed as they are have got real difficulties, and I think we grew at the right time.”

In the face of continuing economic challenges, Turnbull doesn’t think any firms can take things for granted: “How quickly the entrants to the market through alternative business structures (ABS) will challenge high-volume legal work is as yet unclear. I think they are likely to go for England first as Scotland is a relatively small market.”