His firm is marking 250 years, but Shepherd and Wedderburn’s chief executive Stephen Gibb knows that what comes next is what really matters. He tells the Journal how he sees the changing market
“History is interesting, but what is really important is where we are now and where we are going.” So says Shepherd and Wedderburn (S&W) chief executive Stephen Gibb, reflecting on his firm’s 250th anniversary which falls on 6 July this year. Having piloted a distinctive course, particularly in the years since the financial crash, there are some interesting comparisons to be drawn with its rivals at the top end of the Scottish market.
What was once a somewhat patriarchal firm is rather different now. Gibb himself, a “classic Glaswegian” (his description), studied and qualified in the city, found corporate law to his liking and was given a spell in London in the early 1990s by his first practice, Bird Semple Fyfe Ireland. There followed a partnership in the newly demerged Fyfe Ireland, from where he was headhunted into S&W in 1999. Moving into management to support CEO Patrick Andrews in 2009 as recession hit, he stepped up to the top post three years later.
What of the story since? Without being prompted, Gibb volunteers that the 2014 acquisition of Tods Murray out of administration made a “huge difference” to S&W’s prospects. “We brought over 100 people into the business. It really gave the firm a shot in the arm. For example, we got a tremendous banking practice and really strong private client and rural teams, and we discovered that you could have a very good and strong referral practice [taking on Scottish work for English-based firms] while having a sizeable office in London.”
The received wisdom had been that you could have one or the other but not both. “It was utter nonsense as we subsequently discovered, and we’ve actually got a very strong and growing referral practice that works cheek by jowl with our London office.”
With the firm’s offices – it moved into its present Edinburgh HQ in 2008 – able to absorb the extra numbers, it was able to refocus on the Scottish market as well as its wider interests, and followed up by reopening in Aberdeen in 2017 after acquiring The Commercial Law Practice. Gibb is still looking for growth in Scotland and elsewhere: further hires will be announced, to add to the now 78 partners.
“When you are looking at the rest of the UK and externally, it’s a bigger market with wider opportunity, though there are also lots of other lawyers in it. But we are very conscious that Scotland is our home market: we are a Scottish-headquartered firm, and we have been focusing quite hard on ensuring we maintain and increase our market awareness in the Scottish market as well as looking externally.”
It is the macroeconomic environment that presents the biggest challenge, but Gibb sees strong market growth in two of S&W’s key areas, renewables and regulatory. And despite the uncertainties ahead – “You would be daft frankly not to have a degree of concern,” he says of Brexit – Scotland is still attracting a level of inward investment second only to London in the UK table. “The challenge at the moment is nobody knows what’s going to happen, and that always creates concern, but at the end of the day you have to look to what your clients are thinking and doing, and our clients in the areas we are working in are still investing. So there is still a reason to be cautiously optimistic about the prospects.”
Of what used to be the Scottish Big Four, S&W is the only one not to have merged with a UK and international partner. That is a strategy of choice, but what lay behind it?
“We had several factors really,” Gibb replies. “We believe very strongly that there is room for a few real quality, strong, independent Scottish firms, and we believe that we have top quality. A big part of it is our clients, because you have to take these major strategic decisions around what your clients are really interested in. Good luck to the firms that have gone into merger, and some of them are doing very well, but when our clients are looking to do business internationally, for example, they want to be served by experts, by the best in the local market, and that doesn’t necessarily mean the local office of an international and larger firm.”
As well as being founder members of the World Services Group network, S&W has a more informal network of “what you might call best friends: we have very good links with what we consider to be the best local firms in their jurisdictions. If you have a client that wants to go out and do an acquisition in the telecoms area, or advice on what the electricity regulation position is say in an ASEAN country, you need to pick a firm that actually has that expertise, and that’s what we are able to do because of those links”.
He adds: “If your relationship is close enough and good enough with your client then you can manage local lawyers in other jurisdictions and help them implement what they do there. We had a partner in Budapest last week managing a big office acquisition for a client; we’ve others, in India for example, an oil and gas client, that happens quite a lot. And similarly other firms will refer clients to us on the same basis, so there is reciprocity involved.”
Their experience is different, in other words, to those merging firms that cited client pressures for a single firm to meet their cross-jurisdictional needs. “Our clients have not demanded that,” Gibb states. “They have basically said to us that they like the fact that we are not recommending them to firms we don’t know, and that’s the critical point: you have to know who you are dealing with and you have to be confident that they are capable of doing what your client wants them to do. By and large most clients don’t go to a firm just because of its name. They go because of expertise and because they believe that the individuals they are dealing with are the best people, so you have to be able to genuinely provide people you know are good.”
As a firm claiming to work in around 100 overseas jurisdictions, how does S&W go about attracting business outside Scotland? Through client recommendation, is the answer, much the same as any high street firm. “The best way to get work is to do a good job,” Gibb affirms. “It just is. You can and you do use your website, directories, go to the International Bar Association, you do trade delegations, and that is helpful in terms of raising brand awareness, but most people will look to get confirmation or client recommendations from somebody about what you do.”
The firm has been closely involved with the fledgling Scottish Legal International. Can it add to the international presence S&W has already achieved?
“I think that is a really good initiative: the Law Society and Scottish Development International need to be praised for that. It is about increasing the brand awareness of Scottish solicitors and Scots law abroad, and I’m a passionate believer in the brand of Scottish solicitor, because it still is very strong. An initiative like that will help us, because we are up against the might and sales power of the City of London, and increasingly the international US firms in London, to go out and say look, we are really high quality people too, we are skilled and able to do what all these others do, not only in Scotland.
“The quality of our graduates and of the training programmes from Scottish firms is also really highly regarded. We see it from the number of our people that are targeted by English firms; we see it from the fact that all the major English firms now actively recruit from the Scottish universities because they really like the quality of people they get.”
Lure of London
Although few of the Scottish independents have a London base, Gibb believes his firm’s presence there, set up in 2001, to be vital. “We regard London as a fundamentally important part of our business and one of our USPs, because our clients tell us that it’s really important to them, and because it provides us with access to some areas of work that we would probably otherwise struggle to get.”
On the question of scale, a challenge for any Scottish firm seeking to make an impact there, he observes: “We’re very clear that we are not one of the major London firms that have huge strength in depth and resources. We focus very tightly on what we do in London, and that works for us. The key is knowing what you are good at and sticking to it.”
That approach perhaps counters the handicap of being unable to attract outside investment in the way an English regulated firm can under ABS, but Gibb has other reasons for awaiting with some apprehension the outcome of the review under Esther Roberton.
“I am quite concerned about the potential of throwing the baby out with the bathwater in relation to that review” – the baby being the Society. “I think the Society does a very good job here. I’m not trying to blow smoke; I think the regulatory function sitting within the Society is a good thing. You can have a debate about the complaints function, because there is a need particularly for the public to be assured of independence in the handling of complaints, although I do think that in conduct matters the Society does a good job.”
Not the end of lawyers
What are his ambitions now for the firm? Gibb homes in first on bringing in the best people. “We’re a people business in a service industry. If we want, as we do, to remain at the top of that, we have to provide the best service to clients, and to do that we have to have the best people, the best working environment and the best overall conditions. That’s something I am personally very passionate about.” Five separate groups in the office are working on diversity and inclusion issues such as race, gender, social mobility, LGBT and disability, “and all of those are very active, very popular... I’m a state schoolboy from Glasgow so I’m a strong believer in social mobility”.
To that he adds “market leadership and quality of service in Scotland” – which means continued growth, but not size for size’s sake. “It’s all client driven at the end of the day, and that’s what has to drive our growth and ambition. We’re also looking to grow our business across the UK and internationally. And we believe as we talked about earlier in remaining independent, Scottish headquartered: we believe that’s the right thing for our clients and the right thing for the business.”
An enthusiast for IT, Gibb explains that the firm is already using AI tools with clients, among many automation projects in progress. “That’s about speed, it’s about competitiveness as well, and that will just continue to develop. We have a practice development team here who are focused only on that and it’s absolutely fascinating. There’s been a lot of stuff about it replacing lawyers. No it won’t. I don’t think so. And I don’t think it will be nearly as quick as people talk about. But it is happening.
“If you talk to the lawyers of the future – and a lot of them are sitting in here – they are coming out of university much more tech-aware than previous generations, and talking with your trainees, your NQs, is for me critical in terms of looking at where all that is going to go, because they know.”
In short, Gibb hopes the name Shepherd and Wedderburn will have a good few years’ life in it yet. “I hope I would be sitting here in 250 years telling you about it – but that’s a separate development! It’s actually quite something when you think about it: we’re older than America, we are really proud of that but we also want to talk about the fact that it’s not really about history.”
That, of course, is where we came in.
To mark its anniversary, Shepherd and Wedderburn has commissioned with the Fraser of Allander Institute a special study of the Scottish economy, part of which will involve clients and the community over the coming year
250 years: a (business) family tree
Shepherd and Wedderburn traces its history back to 6 July 1768, when David Stewart of Stewarthall, Stirlingshire was admitted as a Writer to the Signet. Little more is known until 1793, when William Patrick of Roughwood became a WS and entered into partnership with him. They practised as Stewart & Patrick WS at various addresses in Edinburgh’s emerging New Town. Stewart died in 1823. Patrick assumed James McEwen of Bardrochat in 1830 and John Carment in 1848, the firm becoming Patrick, McEwen & Carment WS.
Following Patrick’s death in 1861 and McEwen’s in 1874, Carment assumed as partners Joseph Maclaggan Wedderburn and Graham Watson in 1878, and the firm became Carment Wedderburn & Watson WS. Carment’s nephew Joseph was assumed as a partner in 1900, and in 1902, the year after John Carment’s death, the firm moved to Glenfinlas Street, off Charlotte Square. Watson’s father was manager of The Scottish Provident Institution; Wedderburn was a director of the British Linen Bank for over 50 years and one of the driving forces in the formation of the combined firm in 1922.
Alfred Shepherd was born in 1857 and admitted a WS in 1887. The following year, he and fellow Dundonian John Erskine Guild established Guild & Shepherd at 63 Castle Street, Edinburgh, moving to 16 Charlotte Square in 1908. Shepherd was an early specialist in company law; Guild retained strong business connections with Dundee. His nephew Reginald, and great nephew Ivor, in time became partners.
On 1 July 1922 Guild & Shepherd and Carment, Wedderburn & Watson amalgamated to form Shepherd & Wedderburn, based at 16 Charlotte Square and also acquiring No 15. With 10 partners, the firm would have been one of the largest in Scotland. In time it developed into a leading general practice law firm. No one played a more important role in this than Ernest Wedderburn, the nephew of Joseph Wedderburn. Sir Ernest, as he became, was also instrumental in forming the Law Society of Scotland.
In 1937, Bill Bowes joined the firm as an office junior, aged 14. He did not have the privileged background of most solicitors at the time but, encouraged by Sir Ernest, studied and later qualified as a solicitor. He was assumed as a partner in 1967, marking the beginning of the firm’s ongoing commitment to diversity.
During the 1950s the pace of professional life began to quicken. Mechanised accounting was introduced in the cashroom and Saturday morning work was abolished. In 1959 the firm amalgamated with Macpherson & Mackay WS, a court firm, paving the way for the specialist litigation practice that then developed. The corporate department dates from the work of Roger Inglis and Ian Inglis (no relation) in the late 1970s.
An outstanding figure during the post-war era was George Henry, whose review of the law of conveyancing and land registration led to the introduction of the land registration system since adopted throughout Scotland.
By the 1980s the firm’s Charlotte Square base was becoming too small and inflexible, and it moved to spacious modern accommodation, first in 1993 to Saltire Court, Castle Terrace, and then in 2008 to 1 Exchange Crescent, Conference Square. In 1997, the firm opened its first office in Glasgow, and four years later its first London office. In 2006, it became a limited liability partnership. The acquisitions of Tods Murray in 2014 and The Commercial Law Practice, Aberdeen, in 2016 have enabled it to expand further its specialist expertise and geographic reach.
From a history of Shepherd and Wedderburn prepared by Tom Drysdale, former chief executive. Find out more about Shepherd and Wedderburn, here.