Scotland’s Semple Fraser has begun a dramatic firm-wide strategy review amid claims that its three offices are discussing separate merger deals.
In a statement a spokesperson for 20-partner Semple Fraser confirmed that it had launched a strategic review and was assessing options “for the future of the firm”.
One Scottish-based senior source said the firm’s Glasgow office was discussing a tie-up with Maclay Murray & Spens, while the Edinburgh base was in discussions with Dundas & Wilson. The firm’s Manchester office meanwhile is understood to have held similar talks with Weightmans.
Another lawyer added that Semple Fraser was known to have approached several firms in the past about merger deals.
Semple Fraser managing partner Simon Etchells admitted that the firm had been hit by the flailing economy and contraction in the property and construction sectors.
He continued: “It’s well known that the market for commercial legal services has contracted, and we’ve been weathering these challenges. We’ve reduced our costs but are currently still reviewing the business and our alternatives. This process is underway and we will not be making any further comment until it is complete, and the partners have decided on the best way forward for the business, our clients, and our staff.”
The firm refused to state turnover for the 2011/12 financial year but The Lawyer estimated revenues of £10.5m. In 2010/11 the firm posted revenues of £12.2m up 10 per cent on the previous year. That was still lower than pre-2008 when, in 2006/07, the firm posted turnover of £15.4m.
Maclay Murray & Spens’ chief executive Chris Smylie said the firm explored all opportunities but that its had not agreed a deal with Semple Fraser.
He continued: “Issues [concerning Semple Fraser] are known and partners are understood to be looking for new homes. We know that Semple Fraser has a lot of good business and people, and of course we are looking at opportunities. But there is nothing in place that constitutes an arrangement.”
Weightmans declined to comment while Dundas & Wilson did not respond to requests for comment.
According to the firm’s 2010/11 LLP “costs also rose significantly primarily as a consequence of the cessation of staff cost restrictions operated during the preceding year. The members consider the profit before taxation of £3.7m to be satisfactory. The members expect market conditions to deteriorate in the year to April 2012”.
One source with knowledge of Semple Fraser added that its Glasgow rent was high – estimated to be around £30 per square foot – and had also made the firm vulnerable.