Path to growth

“I never make predictions.” So claims the managing partner of one of Scotland’s most successful legal firms, also newly appointed to chair a leading economic policy-forming body. Bill Drummond must be doing something right, and it isn’t all down to luck.

Now in his sixth term after 15 years at the helm of Brodies, the firm is, he informs me, about to top the 80-partner mark despite having remained resolutely Scottish-based. For the next three years, Drummond will also take charge of the board at the Scottish Council for Development & Industry (SCDI), during what must be the most crucial decision-making period in the nation’s history.

SCDI’s full name sounds like some quango, but it is in fact a members’ organisation open to all with an interest in the Scottish economy: businesses large and not so large, local and central government, unions, third sector organisations and individuals all number among its 1,200 members. There are also several leading law firms, which Drummond, who has already served nine years on the board, three as deputy chair, believes have a “significant role to play”.

With a principal object of promoting sustainable economic development in Scotland, SCDI encourages members to feed ideas into its 27-strong executive team through direct contact, regional meetings and showpiece events such as its annual forum. The 2013 version, which takes place this month, has attracted both the First Minister and the Secretary of State for Scotland, among others, to speak.

“A thought leadership forum”, Drummond describes it, adding: “It will have detailed sessions where we are brainstorming some of the biggest challenges for the economy, and indeed because it’s always about Scotland’s economic future and policy development, we’ll be looking forward to some of the challenges that we will be seeing through the next 18 months up to the referendum. But always with the eye firmly on the future, beyond 2014.”

Economic impact

I suggest that it must be difficult for a body with such a diverse membership to arrive at a consensus on matters of economic policy. “I think the strength of SCDI is that it’s thought led, evidence led,” Drummond replies, “so if members are able to come forward with powerful arguments for policies then SCDI will give them a voice. Yes, SCDI will sometimes have a dialogue on issues that not all members agree with, but we will always come to a position and put it forward. Nobody should be afraid to put up their hand and say this is the wrong thing to do, if they have reasoned objections.”

Can he point to particular areas where it has succeeded in influencing Government policy? Drummond points out that SCDI often does not operate alone: it will work with the oil and gas sector, for example, to press for a workable taxation regime; it chairs the Scotland’s Cities forum, where the various city chief executives meet to discuss their economic progress; it takes an interest in youth unemployment, graduate training, the health and safety regime, working with the Scottish or the UK Government as appropriate. It also pushed for the reform of the Scottish planning system. “So there’s a lot of things that go on and need to go on to help ensure that businesses can operate effectively in Scotland.”

As the interview was to reveal, Drummond is very much a believer in proactively shaping your own future, and a query whether the global economic situation frustrates SCDI’s efforts is positively a red rag. “Nothing will be achieved if you sit back and do nothing,” he remonstrates. “It remains to be seen what can be made to happen, but something I’m very keen to ensure is kept in sharp focus is, if you want to attract investment into our country then operating in Scotland has to make economic sense.”

He goes on to point out that it isn’t policymakers but boards who make investment decisions for businesses, and to attract them to Scotland the infrastructure has to be in place, be it transport or the broadband network. “People talk about these things as if they’re academic issues, but they’re not: they’re massively important in practical terms.”

International outlook

SCDI however is not just a lobbying group, as it takes an active role in supporting Scottish businesses seeking to develop overseas markets, particularly through organising trade missions. “Communication is critical to just about every aspect of business life,” Drummond comments. “Whether you’re running a business or trying to connect with customers or clients, you’ve got to set out your stall. The trade mission programme has resulted in many connections being made by Scottish businesses, and organisations not traditionally thought of as businesses such as universities, colleges and training organisations.”

With economies such as Brazil growing in importance, SCDI’s mission is to discover what opportunities these economies present for Scotland, and for businesses, including law firms, that want to attract investment in Scotland. “If you’re not out there and starting to understand what organisations in these other countries think about Scotland, you can’t really understand what they require by way of, in our case, legal services, in other cases infrastructure or whatever it may be, to encourage their investment in Scotland or engagement with Scottish businesses. So there’s an enormous amount to be gained in going on a trade mission if you go really willing to learn and to engage, and to use the knowledge that you have gained to shape your own tactics.”

As a Scottish-based firm, to what extent does international work play a part in Brodies’ growth strategy? “It’s a Scottish economy-focused law firm,” Drummond replies, “and it’s focused on the needs of the public and private sectors and indeed of individuals in Scotland. But in doing that, we therefore have a very large global client base where organisations that are based outside Scotland have major stakeholdings in Scotland. From our point of view, it is extremely important that we understand what is happening in the decision-making process of global organisations, whether they’re based in London or New York or Amsterdam. So engaging with clients that are based globally is of enormous importance to Scotland, because Scotland’s major industries, in many respects, are global themselves.”

Pursuit of excellence

Received wisdom has it that in the modern market legal excellence is taken as a given, and clients are looking for something more. When I ask Drummond what has been Brodies’ strategy through the recession, however, his simple summary is: “A key element of our strategy has always been to become truly excellent lawyers.”

Suggesting initially that that can be seen as “uncomfortable language” within the sector, he adds: “I think what has mostly underpinned our progress as a business, let’s put it that way, has been a continued focus on delivering the services clients want and being willing to change in many ways in line with clients’ changing priorities through the recession. And throughout that process of change, to continue to focus on building excellent teams that are relevant to clients now and hopefully in the future.”

Drummond acknowledges the “something more” aspect, but his further comments suggest a focus first of all on the right investment decisions based on good business intelligence. “To achieve growth in the type of services that clients want, you have to invest. You have to take business risk, based on what you learn from the marketplace.”

A lesson well learned, to judge by the firm’s Aberdeen office, which already supports 45 people just two years after opening. “Our firm has been seeking to take the right type of investment risk for much of the past 15 years,” Drummond continues. “It all seems like rather hard work but, at the end of the day, you measure your progress and we do feel that we’re making progress through it. Why am I involved in SCDI? I am involved, and many of our partners are involved in other organisations, because it all informs our own investment decisions. We understand from SCDI’s work and the engagement of SCDI members across the economy what they see as their challenges, and are better able to shape the services to support them.”

Work, engage, act

It is at this point in the interview that he disowns the making of predictions. “If there’s one lesson has been learned over the past five years, it’s been that predictions are wrong within a week of them being made, whether you’re Chancellor of the Exchequer or an economic commentator or – dare I say – the managing partner of a law firm.” The Cyprus crisis in the eurozone, which was on no one’s radar in Scotland a few weeks ago, is a case in point. “All I can predict is that Brodies and SCDI, and hopefully most of its member organisations, will be working to improve the economic outlook rather than sitting on their hands waiting for things to get better. If you do that, nothing will happen.”

He equally firmly resists any invitations to offer strategic advice or insights to the profession. “You’ll start getting me into trouble!” he protests. “I wouldn’t presume to think that I knew what other firms’ particular strengths were or what their clients wanted. I know what we’ll do, which is concentrate on our clients and on the areas of the economy in which our clients engage whether they’re public or private sector or whatever, and also concentrate on services.”

He continues: “Every law firm in Scotland is different. I think lawyers work very hard; I think lawyers ought to value their services; I think they ought to articulate strongly what it is they can do for clients; I think there is no room for dumbing down of legal services in our sector; and I think integrity and just pure 100% client focus, all these things are qualities that Scottish lawyers and law firms can bring to bear. If they do that and just roll up their sleeves and get on with it, I think they can be a success… And count the pennies too, look after the knitting when you’re in business, get the business fundamentals right.”

Some hints there, and similarly when asked whether we are overlawyered, he comments: “I think it’s up to lawyers as business people to get up off their proverbials to generate more activity than we’re currently seeing. And see off some of the competition that’s emerging in these sectors.”

Talking of which, now that ABS, to which Drummond and his firm have consistently been opposed, is about to happen, what impact does he expect it to have? “I am very keen that the impact should not negatively affect the reputation that lawyers as people, and their firms, have as being of the highest integrity, so I’m very keen that there is no confusion between what a law firm does and what other forms of business do.”

While it is still early days, the Scottish marketplace, Drummond says, is different from south of the border. He adds: “I’m still not certain that ABS models are suitable for the Scottish marketplace. So I think if Scottish lawyers get their sleeves rolled up and really seek to advocate what they can do for their clients and engage with the marketplace, then I hope they will be seen as having all the qualities they have traditionally been associated with, and business will have the confidence that there is a robust independent legal sector in Scotland able to service its needs. That I see as critical.”

So his message is that people hold their future in their own hands? His answer is short and to the point. “Fundamentally that is 100% right. And policymakers ought to be supporting that future where they can.”

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Political climate

Sustainable development, in SCDI’s book, would have the best chance of flourishing in an environment where all parties and parliaments work with business and civic Scotland on an action plan for growth. Such was its chief executive’s new year message, anyway. Is that just wishful thinking? Despite the fault lines created by the referendum campaign, Drummond comments, “I think there’s probably a lot more co-operation goes on between Holyrood and Westminster, for example, than you would believe if you just read the newspapers. We’d always like more co-operation, but there’s probably a degree more than one might guess. Our major industries in Scotland are major industries for the UK as a whole, so it’s important that all sides do get together on this.”

And what of Scotland’s future? SCDI is avowedly apolitical, but what are the key questions it wants to see covered in the independence debate? Drummond explains that it is carrying out extensive member research from which it will be raising the issues that have to be got right for the Scottish economy post-2014. Apart from the major things like Scotland in the EU, he says, “What we’ll want to see is the ability to do business in Scotland being enhanced, not threatened; investment in Scotland encouraged, not discouraged; regulation being efficient, not inefficient; to see the cost of change whatever it may be, yes or no: we want to see efficiency in the change process.”

SCDI has a “Blueprint for Scotland” paper, one pillar of which is to strengthen Holyrood’s responsibility for tax and spending decisions that promote sustainable economic growth. Drummond believes the new taxation powers conferred last year are only part of a direction of travel. The impact has yet to be felt, say of the land and buildings transaction tax on the real estate sector, but he comments: “It’s incredibly important that the detail of the proposals as they come through is got right. SCDI’s role is to engage with those proposals, analyse them, engage members in assessing whether or not the direction is the right one, and try and ensure that the detail when it comes out is right and it promotes economic activity.”

Encouraging young people

Another practical aspect of SCDI’s activities, one with the aim of helping the Scottish economy in the long term, is its Young Engineers Club, which engages perhaps as many as 10,000 school age children across Scotland in activities designed to encourage them to think about engineering as a career in the future. “It’s a tremendous success”, says Drummond, “and something I’ve always been keen to advocate since becoming a member of SCDI. Looking at the larger engineering companies that operate in Scotland from all sorts of sectors, they really value that sort of practical activity on the part of SCDI.

“There’s another important angle to that, which is SCDI’s promotion of the STEM subjects and in particular encouraging school age girls to think about engineering and science as a career future. Again there are considerable signs of success, seen by the uptake of interest both at school level and on the part of businesses.”

Some more quotes

Bill Drummond on:

The role for law firms in SCDI: “There are many strong members of SCDI within the legal sector. So first and foremost SCDI warmly welcomes the law firms that are members of it; it engages with them. I like seeing SCDI member law firms hosting events, which we will help them to, round the country, and if you look at the legal sector as a whole it does make a significant contribution to the Scottish economy not just in terms of the law firms themselves but the legal sector supply chain. So I think it has a very significant role to play in SCDI and I very much hope that law firms will engage more and more with SCDI in the future.”

Generating activity in the legal market: “I think lawyers have an enormous contribution to make to the economy as a whole, but you have to go out there and look for work. There will be clients out there who may be muddling along not using lawyers, and if lawyers are able to articulate what they are able to do which in the long term will be of added benefit to their clients, they will be able to generate more legal activity.”

Whether it is inevitable that Brodies will have to expand into the rest of the UK if it wants to continue on its growth path: “It is far from inevitable. People were telling me in 1998 that there was no more room for investment in the Scottish market if you wanted to get the right type of clients and develop the right sort of services. It was rubbish then and it is rubbish now.”