Administrators called in at historic law firm
Property leases taken on before crash became harder to service
ONE of Scotland’s oldest legal firms has gone into administration following long-running financial difficulties.
McClure Naismith, first established in Glasgow in 1826, is one of a number of firms that have struggled since the credit crunch after signing up to expensive pre-recession leases only to see turnover tumble.
On Friday, Thomas Campbell MacLennan and Alexander Iain Fraser, of FRP Advisory LLP, were appointed joint administrators of the McClure Naismith partnership. They hoped some jobs could be saved as negotiations continued with a number of other firms.
The other companies are already in the frame to take on some of the firm’s most profitable teams.
Seven of its 29 partners, including chairman Robin Shannan, are expected to go to Maclay Murray & Spens, while a further five are expected to go to Harper Macleod.
Morton Fraser is also thought to be interested in parts of the busi- ness. Mr Shannan had previously confirmed that the firm was undertaking a “strategic review” of the business with a view to a merger.
At the time, he said: “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.”
McClure Naismith was founded as a Glasgow-based practice before opening its first Edinburgh branch in 1979. It went on to open a third branch in London in 1991. It advises clients on a range of legal affairs including litigation, real estate, corporate and banking, but has been late in filing its accounts for the 2013/14 financial year.
In May this year Companies House began a striking-off action against the firm, saying its failure to file was a breach of the Companies Act 2006, and warned that unless it filed by August 15 it would be struck off the register and dissolved.
However, the action was halted a day later, with Companies House saying that “cause has been shown why [McClure Naismith LLP] should not be struck off the register and accordingly the registrar is taking no further action”.
While McClure’s turnover has dropped from a high of £15.4m in 2007/08 to an estimated £10m in 2014/15 – a drop of 27 per cent – it also has a relatively high level of debt that must be paid off in the current financial year.
The firm’s LLP accounts for 2012/13 reveal that McClure’s had loans of just over £900,000 due to mature in February 2016, with its total debt standing at about £1.5m at that time.
The firm had originally been due to pay the £900,000 balance by the end of the 2013/14 financial year after breaching its covenants, but Bank of Scotland waived the breach and renewed the facilities.
McClure’s was one of a group of Scottish firms that signed up to expensive leases in the pre-recessionary years only to find the cost harder to service following the crash of 2007. In 2014, McClure’s said it paid a total of £944,000 each year for its offices in Edinburgh, Glasgow and London.