Scotland
Recent years have been tough ones for the Scottish legal market. The country’s economy has under-performed the United Kingdom as a whole and the gradual takeover of many well-known Scottish names by companies with their headquarters south of the border or further afield means that the corporate client base for Scotland’s legal community has remained static at best.
This, combined with the country’s apparent flair for producing talented lawyers by the bucketload, has left Scotland’s law firms with an ultra-competitive, over-lawyered legal arena and the effect on their shape and activities has been profound.
The initial solution for Dundas & Wilson and McGrigors was to join the accountants’ legal networks – Andersens and KPMG respectively – but Enron and the subsequent regulatory changes have outpaid that strategy and both Dundas and McGrigors found themselves independent again.
Now, at the top end of the market, the “big four” of Dundas & Wilson, Maclay Murray & Spens, McGrigors and Shepherd + Wedderburn have all adopted strategies which see them aiming to become leading UK, rather than just Scottish, firms which happen to have their headquarters north of border.
Those Scottish clients who have not become part of national and international conglomerates are also setting sights further afield and, as a result, their legal requirements extend well beyond Scotland. Meanwhile, London’s capital markets and law firms have been capturing an increasingly large share of Scottish companies’ big transactional work for some years now and, while there are exceptions, most deals over the £50m market head straight down south.
For all these reasons, the focus of growth for the big four is likely to be their London offices, rather than Edinburgh and Glasgow. “In Scotland, almost any work you win is at the expense of another law firm, and we have to fight tooth and nail to get it,” says one leading managing partner. “All the big four are looking hard at where they can achieve the growth they need and they are looking as much outside Scotland as inside.”
Below the big four, many firms have developed UK-wide practices, particularly in projects and PFI/PPP work (for which, like the Poll Tax, Scotland was the test-bed), banking and increasingly in property thanks to the relatively low charge-out rates they can offer compared to many English firms.
These firms, especially those towards the top of Scotland’s middle tier such as Brodies LLP, Burness, MacRoberts and Tods Murray, have a dilemma, however. Do they follow the ‘UK firm’ strategy and risk losing valuable Scottish law referral work from English firms or do they remain Scottish-focused practices and hope to pick up some of the clients the big four will inevitably leave behind as their costbases grow and some of their best lawyers are relocated to London?
The latter strategy also has its risks. This tier of 20-35 partner firms is an extremely crowded one and most lawyers in Scotland expect there to be consolidation in the market. They have, however, been saying that for years and yet few examples of middle–tier mergers exist, perhaps because two of those that did happen – Bird Semple and Fyfe Ireland in the 1980s and Bishop and Robertson Chalmers and Alex Morison & Co in 1999 (which became Scotland’s fourth largest firm) – subsequently unravelled.
Yet while Scottish law firms can be rather conservative and old-fashioned, the ultra-competitive market in which they operate means they often have to be more innovative than their English counterparts, especially in respect of the growth of non-legal consultancy services, (for example in employment, planning, executive remuneration and, since the creation of the Scottish Parliament in 1999, lobbying) and their use of IT.
The relative lack of obvious growth opportunities in Scotland has also stalled the advance of English firms looking to press their presence north of the border. Despite persistent rumours of an English invasion throughout the 1990s, the sum Sassenach presence amounts to DLA Piper, which took over Bird Semple in 2000, Pinsent Masons in Edinburgh and Glasgow and a small oil and gas focused Cameron McKenna presence in Aberdeen.
Both Pinsent Masons and DLA Piper, incidentally, have set up offices of equal size in both Edinburgh and Glasgow which, although only 50 miles apart, have distinct business traditions – Edinburgh in financial services (it is Europe’s eighth largest financial centre) and ‘old money’; Glasgow in trade and commerce. These distinctions may have little relevance in the 21st century, but only a few major law firms are based solely in one of the cities, for fear of offending potential clients in the other.
Below the leading firms, Scottish lawyers tend to be more generalist than in England although still specialising in discrete areas. The recovery in the market is most marked at the junior end, around the 3-5 PQE mark and, while most areas are in demand, the greatest need is for candidates with commercial property and private client experience, while PFI, projects and IT/IP lawyers are also popular at this level. Senior associates may find things a little more difficult, as firms are wary of upsetting incumbent associates seeking partnership by recruiting yet more rivals, although fast-expanding DLA Piper has been a good source of opportunities in recent times.
Given the UK-wide focus of an increasing number of law firms, a notable feature of the recent years has been the popularity of English-qualified and experienced lawyers in Scotland, especially those with commercial property, banking/financial services and IP/IT experience. These may include English lawyers looking for enhanced legal career opportunities and a change of lifestyle or Scots looking to return home. As with domestic job-changers, the optimum time to make the move is 3-5 PQE. The same applies for in-house vacancies where, however, demand is outstripping supply.
The big in-house legal departments are mostly found in the financial services sector and recruitment here is becoming increasingly targeted at specialist lawyers, for example pensions and regulatory lawyers, rather than those with more general corporate/commercial experience. The lack of plc headquarters in Scotland means that large in-house departments outside the financial services industry are few and far between, although public sector in-house recruitment has grown considerably, in terms of both legal career opportunities and prestige, as many of Scotland’s local authorities seek to retain more high-quality work in-house.
Salary Guide 2008
| PRIVATE PRACTICE |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
2001 |
| Civil Litigation |
26-30 |
28-31 |
30-32 |
32-34 |
33-38 |
38-40 |
40-45 |
| Comm. Litigation |
31-34 |
32-35 |
34-37 |
35-39 |
39-43 |
42-46 |
44-48 |
| Comm. Property |
32-35 |
33-36 |
35-38 |
38-42 |
42-48 |
45-50 |
50-58 |
| Private Client |
31-34 |
32-35 |
34-36 |
34-38 |
36-40 |
38-43 |
42-48 |
| Corporate |
32-35 |
32-36 |
35-38 |
40-45 |
44-48 |
45-50 |
52-58 |
| London |
55-60 |
60-65 |
65-70 |
70-75 |
75-80 |
78-85 |
85-95 |
| IN-HOUSE (excluding benefits) |
|
|
|
|
|
|
|
| Public Sector |
25-28 |
26-30 |
27-31 |
32-34 |
34-38 |
38-40 |
40-44 |
| Financial Services |
30-32 |
32-34 |
34-38 |
36-40 |
42-48 |
44-48 |
48-55 |
| Industry / Commerce |
28-32 |
32-34 |
34-39 |
38-43 |
44-50 |
45-52 |
52-65 |
Notes:
1. Source: Frasia Wright Associates in depth and ongoing analysis of confidential discussions with lawyers throughout the UK and overseas.
2. Figures are based on average salaries across a range of firms and organisations. (For all of the salary levels, benefits are not included.)
3. Benefits and other payment variables can make it harder to gauge the salary level or market value because compensation is no longer always a fixed number and so no salary guide can tell you exactly how these extras add up for specific positions.
4. Salary levels for senior associates and partners vary depending on many factors such as firm size, length of service, level of responsibility and practice area and so will need to be considered on a case by case basis.
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