An interesting battle is raging in Scotland on levels large and small. In early May, the Scottish National Party (SNP) swept to victory in 56 of the 59 seats available to it in the General Election and party leader Nicola Sturgeon pressed prime minister David Cameron to revisit the draft legislation on devolving more powers to Holyrood.
Bolstered by a suddenly soaring national profile, the SNP leader claimed the proposed reforms were not in the spirit of the Smith Commission’s recommendations following the referendum on independence last year. Entente cordiale persists, but there’s an undercurrent of tension on both sides as the 300-year-old union has never looked under more pressure.
This tussle will continue for some time yet as, although the SNP hasn’t pushed for a second independence referendum, that threat will never be far from the table. The UK government might take a more phlegmatic approach and give the SNP exactly what it is asking for… and more. Cameron has been reportedly pressed by some senior Tories to call Sturgeon’s bluff and put full fiscal autonomy on the table, believing the SNP may baulk as that would leave the Scots on the hook for budget collection and cuts as well as spending, potentially leaving the Scots government with an £8bn hole in its budget.
While Scots politicians push for autonomy, its legal profession is becoming increasingly entwined with England. Clyde & Co is now courting 50-partner insurance player Simpson & Marwick, while the takeover of one of Scotland’s premier firms, Dundas & Wilson, by CMS Cameron McKenna is barely a year old. Gone are the original big four firms that dominated the scene for decades. The two largest Scottish firms are now part of larger empires: Pinsent Masons has a highly credible practice that brings in around £60m in revenues from legacy McGrigors and while the jury is still out on the Dundas/CMS tie-up, its Scots operation has held on to a lot of credible Dundas partners, adding at least £45m to the CMS top line.
Meanwhile, two independent Scots firms, Brodies and Burness Paull, have drawn plaudits over the last five years for turning a domestic focus into startling growth. But such expansion will surely have to cool eventually, despite both camps suggesting that 2014/15 was yet another robust year financially. Burness Paull would be a trophy deal for a significant English player and its Aberdeen merger in 2012 demonstrated that the firm is not averse to substantive strategic steps to gain market position.
Shepherd and Wedderburn is also enjoying a renaissance, aided by the acquisition of Tods Murray last year. Maclay Murray & Spens is generally regarded to be in safe hands under chief executive Kenneth Shand and may well benefit from an Anglo-Scots union now, something it failed to pull off a few years ago with Bond Pearce.
So while the independent Scots firms won the battle over the last few years, the war goes on. More international clients (particularly in financial services) are less concerned about the UK being divided into regional hotspots and demand just one point of contact, be it in Edinburgh, Manchester or London (underlined by big insurers pressing advisers into taking on Scottish operations). Scottish corporate success stories, be they in oil and gas, technology, food and drink or engineering, are increasingly international in their outlook.
Politics and the legal industry in Scotland have become competitive again. Those that were written off have returned and those that have flourished face auld enemies again.
mark.mcateer@legalease.co.uk
For more analysis of the Scottish legal market see: When the hurlyburly’s done – nationalism, devolution and another turbulent period for Scots law firms
