The future for Scottish firms

Brodies’ Bill Drummond on the way ahead for the firm

At this time of year, along with most managing partners, my focus is on financial matters. Our results are pleasing of course, reflecting the hard work of my partners and other colleagues, and the support of our expanding list of clients. However, profitability only tells part of the story and, as far as Brodies is concerned, is simply surface evidence of that hard work for clients.

Our sustained growth has allowed us to invest in developing the relevant, high-quality legal services that our clients need, helping them achieve their commercial objectives and fuel Scottish economic growth as we slowly emerge from one of the most challenging periods in living memory. Moreover, our financial performance has given us the independence to determine our own investment decisions.

In any modern economy, however, a law firm’s contribution has to go a long way beyond facilitating the flow of business. It is about thought leadership, contributing to the development of domestic law, providing insights into major policy changes and engaging with civic society, and the boards of corporate clients and other organisations. Brodies’ partners are heavily engaged in all these activities, not least on constitutional matters and other legal areas in which we are seeing increasing divergence from the rest of the UK. We are proud of our focus on the Scottish jurisdiction and of the fact that we are an integral part of the fabric of corporate Scotland, which is essential if you want to support clients in overcoming the challenges and seizing the opportunities that will present themselves in the months and years to come.

There will be many opportunities for entrepreneurially-minded organisations and law firms fleet-of-foot enough to respond to rapidly changing markets. In the oil and gas sector we have seen a measure of a shift in emphasis from major capital investment projects by the largest exploration and production corporations to a focus on entrepreneurial activity in maximising return from ageing fields and infrastructure. Brodies was lead legal adviser to INEOS Upstream in the biggest investment in the UK Continental Shelf since the oil price slump. The Scottish food and drink sector, meanwhile, is going from strength to strength and is now worth some £14.3bn a year. This year, Brodies assisted The Three Stills Company in securing £10m of funding to build the first distillery in the Scottish Borders for almost 200 years.

We have continued to support activity and innovation in other sectors too – life sciences, manufacturing, renewables, infrastructure, construction (identifying ways in which the private and public sector can work together more closely to find solutions to bridge Scotland’s housing supply gap) and education, working closely with a number of world-famous institutions.

Innovation, of course, is key to success in all of these sectors and our intellectual property team, which was named the Managing Intellectual Property Scotland Firm of the Year in March, is helping clients protect their ideas and inventions, and support a tradition of enquiry and discovery that has been central to Scotland’s success since the Enlightenment, and has shaped the modern world.

Turning to the Scottish legal market, much of the recent commentary has focused on the disappearance of well-known firms, which have been subsumed into larger pan-UK organisations, prompting the question: what does the future hold for an independent, Scottish-focused firm, such as Brodies, which has no presence in London?

Firstly, it is important to point out that we are in a unique position among the leading Scottish firms. We are neither in London nor the product of a merger. We have been pursuing an organic growth agenda predicated on sustained investment in our business, as distinct from the strategy that has been pursued by many other firms, including domestic competitors. Brodies is the only firm without a London office to be ranked as one of the top-ten fastest-growing firms by organic revenue and profits per equity partner over the past five years in the Legal Business 100.

Secondly, it is easy to confuse geography with legal capability. Technology ensures that you are able to deliver top-quality services globally, if you are connected to the right independent law firms. We regularly partner with trusted practices across the globe. Indeed, 80% of our top ten transactions in each of the last two years, while in some way ‘Scottish’, have had a major international dimension. This freedom to choose one of the very top local firms for each client in each jurisdiction is to our mind a credible alternative to a more formal network offering relatively low levels of resource in some jurisdictions and rarely the full service required to support clients’ business-as-usual operations once the initial investment has completed. There are over 2,000 overseas-controlled businesses operating in Scotland, many of which are our clients. Our appointment to look after clients by those organisations’ law firms, whether they are headquartered in London, Paris, Washington DC or Tokyo, we believe reflects our visibility and standing in the wider legal marketplace.

And what of that tired old trope of the ‘fixed cake’ Scottish legal market and the question: how can a law firm continue to grow in a limited market? The market for legal services is evolving all the time and there are significant opportunities out there if you are prepared to seize them. You have to be willing, really, to listen to your clients, and invest in and develop services relevant to their changing needs and the evolution of local markets. To continue the metaphor, every year there are new ingredients in the mix and new flavours – and there is always the cherry on top for those firms willing to respond to clients’ changing appetites.

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