Just days after Scottish firms Morton Fraser and MacRoberts announced their intention to merge, Irwin Mitchell also unveiled plans to combine with Scottish firm Wright, Johnston & Mackenzie (WJM) in what appears to be the start of a Scottish consolidation movement.
While Irwin Mitchell already operates in Glasgow, focusing on banking and finance and personal injury, the merger with WJM would give it access to the corporate, private client, property, and asset management markets in Edinburgh, Dunfermline, Inverness and Dunblane.
The two firms have agreed that when the tie-up is finalised, the reformed management board of WJM will be joined by Irwin Mitchell partners Bruce Macmillan, Craig Marshall and Mark Higgins, with WJM to remain as a Scottish LLP.
In an interview with Legal Business, WJM’s managing partner Fraser Gillies explained the financial pressures driving this latest round of consolidation: ‘It is becoming a competitive market for the best talent, as well as more difficult for firms of a smaller size who want to be in certain markets for certain clients – more scale helps on that front.’
He elaborated: ‘The cost of being a business is growing because of the increasing regulatory requirements. Additionally, IT, infrastructure and technology requires a certain amount of resources which is hard for smaller firms to muster – we need the scale to weather the regulatory environment.’
‘There is a cost point that sits around it,’ said Irwin Mitchell’s group chief commercial officer, Vicky Brackett, echoing a similar sentiment. ‘There are efficiencies to be gained when bringing two smaller practices together.’
She added: ‘It has been driven through the demand of clients who value our national presence in England. We have a gap for client service in the Scottish market, so it gives our clients much more diverse capability in what we can offer.’
‘It is a possibility and even likely,’ surmised Gillies on whether the market will see more Scottish firms merging. ‘There has been consolidation in the past and we will continue to see that.’
On the question of the two firms’ existing offices in Glasgow, Brackett said: ‘Ideally we want to move the two teams together as soon as we can. Our Glasgow team does completely different work to WJM’s Glasgow team, so it is complimentary in terms of the two coming together.’
‘The plans for the Glasgow office are not firmed yet,’ said Gillies, ‘but we will probably bring the two offices together. We have a nice new office building with a good working environment, so I think we will bring the two firms together. ‘
On the time frame for completion of the merger, Gillies responded: ‘We don’t have a live date yet, but we are expecting it to be towards the end of the year, subject to FCA approval.’
‘We wish them luck if that is what they want to do in their strategy,’ established Brackett on the subject of the Morton Fraser and MacRoberts merger. ‘It is indicative of the Scottish market growing that’s driving consolidation. The ability to have good sized competitors in the market will give us a lot of opportunity.’
For their part, the stated intention of Morton Fraser and MacRoberts to combine resuscitated a deal that was called off back in 2017, with MacRoberts’ pension deficit and property liabilities contributing factors in the merger talks ending.
In July, national UK firm Freeths announced the opening of a new office in Glasgow with the hire of Addleshaw Goddard real estate partners Paul Ockrim and Nick Taylor, its first foray outside of England.