Scottish law firm seeking rescue deal
McClure Naismith ‘poised for administration’
The practice is being linked to Bond Dickinson, DWF and Irwin Mitchell as well as a number of Scottish competitors, in the hope of agreeing a so-called “pre-pack” deal that would mean it being bought straight out of administration.
Executive chairman Robin Shannan admitted at the weekend that it was seeking options and sources say it will appoint administrators a week tomorrow (28 August).
Rival firms are said to be preparing to cherry-pick its top performers, according to trade sources.
It is thought that seven of its 28 partners, including Mr Shannan, will go to Maclay Murray & Spens. He has been with the firm for more than 34 years and became executive chairman in October 2012. Five others are being eyed by Harper Macleod, while Morton Fraser is watching the situation closely.\
The firm declined to comment on the speculation but issued a statement after confirming it is “undertaking a strategic review of the business, and is assessing all options, of which a merger is a potential outcome.”
Mr Shannan, who is based in London, said: “We have been reviewing the way forward for the business for some time now, and have previously stated that we will consider all options, including merger.
“The legal market is consolidating with the emergence of large, UK-wide multi-disciplinary firms and smaller, specialist practices. We have very good lawyers and support staff providing excellent services to a wide range of clients but we are finding that medium-sized, independent firms such as ours lack the scale needed to compete.
“Accordingly, we have been working on developing the most effective strategy for the business, our clients and staff. The review remains a work in progress, and in the meantime it is very much business as usual”.
McClures’ turnover has dropped from a high of £15.4m 2007/08 to an estimated £10m in 2014/15 and is also believed to have a high level of debt.
Accounts for the 2014 year to April 30 are listed as “overdue” on the Companies House website.
A compulsory striking off action was discontinued in May for failure to produce accounts, due at the end of January.
Most recent accounts, covering the 2013 year to April 30, show turnover dipped to £12 million (2012: £13.1 million) and profit before members’ remuneration and profit share was £2.7 million (“2012: £2.93 million).
McClure Naismith reduced headcount to 145 in the 2013 year, down from 167 in 2012.
The firm notes in 2013 accounts a bank loan of £906,666 was classified as falling due within one year “as a consequence of a banking covenant breach at April 2013”.
McClure Naismith was founded in Glasgow in 1826 and in 1979 opened its Edinburgh office. Its London office was set up in 1991.
Other law firms have sought mergers or faced collapse in recent years. Semple Fraser failed two years ago and Tods Murray was bought in a pre-pack administration last year by Shepherd & Wedderburn.