Tods Murray’s bid to scotch ‘damaging’ rumours

Market gossip in an upmarket is little more than a gentle annoyance. In a downmarket, on the other hand, it can be extremely damaging.

Market gossip in an upmarket is little more than a gentle annoyance. In a downmarket, on the other hand, it can be extremely damaging.

As reported by The Lawyer last week (23 March), David Dunsire, the ­executive partner at Scottish firm Tods Murray, took unprecedented action when his firm was the subject of ­persistent rumours, writing a letter to a Sunday newspaper to affirm publicly its financial strength.

Speaking to The Lawyer, Dunsire says he took the action because market rumours had become so rife that he was receiving calls from clients and worried employees on a daily basis.

“Rumours had been going around the marketplace since before Christmas and we heard stories about another couple of firms being in difficulty,” says Dunsire. “People said to wait until the year-end, because a firm will fold. In January we discovered we were one of the names that was being bandied about. My view had always been that there was no ­substance to this and it would die down.

“But it didn’t die down, it got ­ridiculous, and I heard from sources in five other firms that we were going into administration.

“I thought I had to do something about it.”

In the letter, which was published in Scotland on Sunday, Dunsire said the rumours he had heard included ­accusations that Tods Murray was on its bank’s ‘at risk’ register and that partners had refused to inject cash into the firm.

Writing that the legal profession “finds it difficult to deal openly with such issues”, Dunsire said in the letter that the firm is “financially secure”.

Dunsire told The Lawyer that he had asked partners to inject money into the firm, but rather than refusing to do so, they had all made the payments some months ago.

“We did a capital call in September when we realised we were going into this market,” he says. “It was a ­measured thing. We took the decision in ­September and put in the money in ­January. It’s the first thing you look at in this kind of market.”

Dunsire says the firm had also made a number of redundancies at the end of last year, although the number was in line with those made at other firms.

“We laid off 17 people – three lawyers and some support staff,” he says. “They were made in the areas that were down – commercial property, corporate M&A and residential property.
“For most firms that have retained a full-service practice, litigation, ­employment and private client are doing okay. We’ve retained those and in this ­situation it helps. We had a heavy dependency on commercial property, but other areas have made up for it and it’s stabilised at the moment.”

Tods Murray’s position appears to be broadly similar to that of other leading Scottish firms, most of which have large real estate practices.

to keep the numbers relatively low so far: Brodies has laid off just seven ­people, while Burness has parted ­company with 13.

Burness chairman Philip Rodney concedes that Scottish firms are facing a tough environment, which is only made harder when gossip about firms starts to circulate.

Speaking about Dunsire’s action, Rodney says: “Rumours aren’t helpful and the ramifications are terribly ­dangerous. I think he’s right to set the record straight because these things are very dangerous.”

Pointing out that there are still ­opportunities in the Scottish market, especially in litigation and renewables, Rodney says the key thing for firms is to look forward rather than back.
“We’re not going to reinvent the past,” insists Rodney. “We have to make the best of the market we’re in.”