News In Focus
Commercial firms sign up partners as McClure Naismith goes under
About two thirds of the partners and staff at Glasgow legal firm McClure Naismith LLP have so far been found alternative jobs after the 189 year old practice went into administration on Friday.
McClure Naismith, which was already several months overdue in filing its accounts at Companies House, was finally forced to call it a day as declining revenues in the wake of the banking crisis meant it was unable to meet its financial commitments, including high office costs at purpose-built premises in Edinburgh and maturing bank loans.
Joint administrators Tom MacLennan and Iain Fraser, partners with FRP Advisory, announced yesterday that they had agreed deals with a number of other law firms for the sale of work in progress related to the move of a total of 80 partners and staff, leaving about 42 at present facing redundancy.
The eight-strong dispute resolution team, including partners John McHugh, E-Ming Fong and Suzanne McGarrigle, are joining Harper Macleod's Edinburgh office, along with two other partners, Philip Sim (real estate) and Scott Kerr (corporate), together bringing work which Harper Macleod expects to add about 6% to its turnover.
A further five partners and around 30 staff in Glasgow and London are moving to Maclay Murray & Spens. The partners are Wilson Aitken (property – Glasgow), Morag Campbell (corporate/finance – Glasgow), Frank Johnstone (consumer finance/debt recovery – Glasgow), Philip Sewell (dispute resolution – London), and Robin Shannan (corporate/finance – Glasgow).
The joint administrators said that Burness Paull is taking on three partners – Bob Binning, Colin Brown and Stephen Scott, all in real estate – and Morton Fraser (Paul Kenneth in property finance) and HBJ Gateley (John Blackwood in banking) one each. A further seven partners are “in advanced discussions with additional firms for their and their staff's moves”. Four current and future trainees have also been offered contracts.
Their statement added that they “are retaining 14 staff of the firm and further developments are expected in early course regarding partners and staff who have yet to confirm destination firms, leading towards an anticipated total of 80 partners and staff of the firm imminently moving to other firms. It is with great regret that the remaining 42 partners and staff have been made redundant, for whom the joint administrators at FRP Advisory will provide as much support as possible”.
Mr MacLennan commented: “We are pleased to have negotiated agreements facilitating employment with a wide range of firms and wish them and their new staff every success. We would also like to extend our appreciation to the Law Society of Scotland and the Solicitors Regulation Authority for their support.”
Founded in 1826, McClure Naismith had a partner strength of 26 ahead of its demise. It opened offices in Edinburgh in 1979 and in London in 1991. Its main practice areas included litigation, real estate, corporate and banking. In May this year the companies registrar began striking-off proceedings against the firm due to its failure to lodge its 2013-14 accounts, but announced the following day that “cause has been shown” why McClure Naismith should not be struck off the register.
Before the financial crash its turnover was £15.4m, but it is thought to have fallen to around £10m in 2014-15. The practice has suffered a similar fate to Semple Fraser and Tods Murray, each of which went into administration after struggling to meet expensive property commitments.
Lorna Jack, chief executive of the Law Society of Scotland, commented: “We are sorry to see McClure Naismith go into administration but understand this was the only viable option given the challenges faced by the business.”
Recognising that some staff would now “face an extremely difficult and uncertain period”, she continued: “We have a package of support and dedicated staff available to solicitors who are affected by the announcement and we will be offering that help to anyone who needs it.”
Ms Jack added that the legal market generally was now more buoyant, but “the profession is undergoing phenomenal change with digitalisation and technology, changing expectations from clients and new entrants to the market all requiring firms to adapt and innovate in the way they do business. It underlines the need for firms to be flexible and to modernise in what is a highly competitive market”.