Dundas & Wilson’s managing partner Donald Shaw unexpectedly announced in March that he is stepping down from his post midway through his second term.
It is unclear why Shaw stepped down, however suggestions from former partners and the market are that partners were unhappy with his management.
He currently remains a partner at the firm and will return to full-time fee-earning work with a particular focus on developing the London real estate practice.
Restructuring partner Caryn Penley and real estate partner Allan Wernham have taken on Shaw’s management responsibilities on an interim basis, however Penley is widely tipped as a possible successor to Shaw. ‘Donald felt his energies were best deployed in growing the London office,’ said chairman David Hardie. ‘Donald talked to me about it a few months ago. It’s all been done in a very amicable way.’
Shaw became joint managing partner with Alan Campbell in 2006. During his seven-year tenure, Shaw was closely associated with bulking up the firm’s London office, which now has 117 lawyers and brings in £24m in turnover.
‘Donald felt his energies were best deployed in growing the London office.’
David Hardie, Dundas & Wilson
The office is well-respected for real estate and construction work but has failed to gain critical mass in corporate or finance. In January, the firm hired two real estate finance partners from Stephenson Harwood, including former chief executive John Pike and Ted Harrison.
Market critics say that Dundas has lacked a coherent strategy since the downturn, with partners raising their concerns over leadership at a partners’ meeting in November last year.
The firm currently lacks international coverage, and announced in February that it was making an as yet unknown number of redundancies in Scotland and London.
Dundas also announced in February that it was opening in Aberdeen, but the move is seen as dipping its toe in the local market which is already over-lawyered.
‘The firm is in a difficult spot, they have taken their eye off the ball north of the border,’ said a former partner.
The firm is now being squeezed as financial institutions move business out of Edinburgh. Dundas, along with other Scottish ‘big four’ firms, significantly suffered through the recession and particularly took a hit from the nationalisation of The Royal Bank of Scotland and the loss of HBOS in 2008.
Turnover at the firm has dipped by 17% in the past three years, from a high of £74.8m in 2007/08 to £62m in 2011. However, the firm has maintained high profitability with a profit margin of 41% and PEP of £379,000.
Former partners claim that as the market dipped, Dundas increasingly became focused on maintaining profitability, leading to a lack of investment in infrastructure and new hires.
‘As a partnership it was fairly dysfunctional,’ said one former partner. ‘There wasn’t much cross-selling and teaming up. People were very protective of their piece of the pie. I have a lot of time and respect for Donald [Shaw] but he wasn’t able to take people forward with him.’