Celtic tigers on prowl

While work continues to flow across borders to London, Irish and Scottish law firms are keen to tap into some of the city's success.

Victoria MacCallum looks at the mutually beneficial relationships that are developing between the square mile and celtic practices

Of all the things that foreign law firms find appealing about opening an office in London, it's not the weather.

The Stock Exchange perhaps, the proximity to Europe doubtless, but the weather? Unlikely.

However, for the growing number of Irish and Scottish firms looking to open a branch in the City, the climate is probably less of a concern than it would be to lawyers used to Californian sunshine.

In the past few years, a number of Celtic big hitters have been moving to the bright lights of London - Dublin-based Arthur Cox, Scotland's highly profitable private equity specialists Dickson Minto and Maclay Murray & Spens, to name but three, have all set up shop.

Some of these have taken a step further, merging their practices with global players to stretch themselves further into the world marketplace.

As reported recently (see [2002] Gazette, 7 March, 6), top Scottish firm McGrigor Donald has merged with City firm KLegal, the associated practice of big five accountants KPMG, and five years ago Scotland's largest law firm Dundas & Wilson threw its lot in with Anderson Legal.

And in a reverse situation, last month City firm Field Fisher Waterhouse announced the formation of a five firm-strong European alliance which included Scotland's Harper Macleod and Ireland's Beauchamps.

So is this a further step on the road towards all-encompassing UK firms, covering Scottish, Irish and English law - or just a case of watch out London, the Celts are coming?

'Opening an office in London has always been part of our plan,' says John Matson, a partner in the London office of Arthur Cox.

'We set up a corporate and banking practice here last year in recognition of the fact that London is such a major financial centre, and we wanted to tap into the huge amount of work which flows through here.'

Citing the Stock Exchange and the plethora of investment banks and financial institutions as incentive for moving to the Square Mile, he also points out that geography is on London's side.

'Much of the work we do in this office is international project management because London is closer to the relevant jurisdictions, and over here we're more likely to know the other lawyers involved.'

Knowing the right people on the ground is vital, as much of the London office's work is to act as a referral agency.

'We don't practise English law, so we're not in direct competition with City firms,' explains Mr Matson.

'However, many of our existing clients are doing more and more work in England, and they're very keen for us to be there to point them in the right direction and recommend good English lawyers for them.'

Paul White, the managing partner of Irish firm A&L Goodbody's three-partner London office, agrees that English firms are seen more as friends than foes.

'Many of the big City firms are in fact our best clients,' he says.

'Much of our work comes from City firms who need advice on Irish law - for example, an international merger or takeover which involves an Irish company - and they will come to us because we have the expertise but we also have the London base.'

Not, of course, that London offices act merely as a referral service or specialist consultants.

McClure Naismith, one of Scotland's largest commercial firms, claims that its four-partner London office brings in 15% of the firm's total turnover - a figure doubtless helped by the fact that the London base practises English as well as Scottish law.

'London is one of the largest legal markets in the world, and if you're good enough you can pick up very good quality work here,' says Robin Shannan, the London office's managing partner.

This is a sentiment echoed by A&L Goodbody's Mr White.

'The leading specialists pick up work wherever they are - where you are doesn't matter so much as who you are and what your reputation is,' he says.

'Although being on the ground is invaluable when people want to call on you at short notice, we also carry out work for Irish clients - for example, I advise the Irish Film Board - simply because we're the best people to deal with that specific instruction.'

This idea of integration seems to be the name of the game, with London offices seeing themselves as very much part of the main firm.

Partners in London are rotated, staying in the office only a few years.

Mr White even finds it difficult to specify what work is generated exclusively by the London office.

'Our approach is very integrated - we deal with work that originates in Dublin and is passed over here, with work that originates here and that we refer to Dublin, and work that we find and complete here.'

Despite this philosophy of integration, the fact remains that few firms can be described, in the strictest sense of the word, as 'UK-based', that is, practising law in more than one jurisdiction.

One that would certainly like the title is DLA, the City giant with offices throughout England, which merged with Scottish firm Bird Sempe in May 2000 to become one of only two English firms - the other is CMS Cameron McKenna in Aberdeen - with a Scottish base, while Masons is the only English firm in Dublin.

'We're quite unique in that we want to spread ourselves across the UK,' says Gordon Hollerin, managing partner of the firm's Glasgow office.

'DLA already had a national coverage across England, and we wanted to extend the full range of services into Scotland.'

He explains that for most firms, Europe is the most natural focus for further expansion.

'Many see Scotland as somewhere that things are done very differently, whereas our eventual aim is to offer clients a seamless service across the UK, where the services they get in London or Manchester can also be found north of the border.'

While he claims, validly, that Scotland has a healthy crop of major financial institutions producing work, and that clients appreciate the UK-wide continuity of service, the reality is that the traffic crossing the Scottish border is resolutely one way, and perhaps understandably.

The Scottish legal world has faced its fair share of problems recently - the market is highly competitive and is slowly reaching saturation, and opportunities to grow a practice domestically are limited by the steady decline of Scottish PLCs.

However, this trend of one-way migration seems to be doing nothing but helping English law firms.

Celtic practices in London do not compete with home-grown lawyers, and seem to exist simply to make their lives easier, whether by advising on Scottish or Irish legal points, giving out referrals to other Celtic lawyers, or even helping to wangle tickets for Irish or Scottish home rugby matches.