Some firms took a long time to adapt to the changing market at the onset of recession. No one can predict the depth or duration of any economic reversal, but one practice openly told The Firm that they realised their very survival was at stake, and quickly cut their cloth accordingly. Steven Raeburn caught up with Malcolm McPherson, managing partner of HBJ Gateley Wareing for a frank chat about rolling with the economic punches through the downturn.

It is very easy to talk up an economic downturn, but as firms of all sizes and disciplines divest themselves of staff in unprecedented numbers, there is no hiding from the harsh reality that we are experiencing the most acute financial reversal in living memory.  It is both refreshing and astute to hear Malcolm McPherson, managing partner at HBJ Gateley Wareing, acknowledging the economic reality, rather than hiding from it, as some of his peers have done.

“It is the third recession since I have been with this firm, but it is unlike any other. It really is frighteningly true,” he told The Firm.

“The concept of the banks running out of money struck home, really quite early. From the end of 2007 we started moving to reduce the cost of operations of the business, quite gently in terms of not replacing people we absolutely didn’t have to.  When things started to hit pretty hard, we were of a mind to be radical in our thinking - it was completely new to everybody. We took a view that you have to make sure your business survives, and survival was a concept that I was very pleased our board bought into. It sounded a bit dramatic, but I don’t think we were wrong. I think we were right.”

Put quite simply, you can’t prosper if you don’t exist, and HBJ Gateley Wareing seem to have embraced the real world more swiftly than many others The Firm has spoken to over the past months, as the depression bit.  Some companies flatly denied they had postponed training contracts, when they had already in fact done so. Other large scale corporate firms denied they had ever made or were contemplating redundancies, when major staff cuts had already been announced or followed within a day or so. Others that have reached the end of their overdraft and exhausted their bank’s patience have loudly trumpeted their fine financial health. The level of denial has bordered on the pathological, and one hopes that those firms take the mask off in their private boardrooms. McPherson is refreshingly frank about the realities of the challenge facing the firm, and one therefore anticipates that his warts and all assessment of the economic landscape will allow the firm to take an honest view of the way ahead.

“It is uncharted territory. In 220 years we have never had to make any redundancies, before now. We have never had to manage downsizing, or people wondering if it was a safe business,” he says.

“You have to make decisions that say at the end of the day, this business will still be here, then it can grow again. In 1975 I worked with a candle on my desk because there was no power. In 1991 I had friends in the property business who went bankrupt. These things stick in your mind. When we made our redundancies in the course of last year, I couldn’t say with certainty that was it finished forever. We don’t know what is coming or what is happening. Our board now meets once a week so we keep in touch with what is happening. That way we can protect those that are important to us.”

McPherson has taken an unusual, almost organic path to the senior partner’s role, having been with the firm since 1975, and has never worked anywhere else. Like others, he concentrates on business development, undertaking no actual client casework, but unlike many others, is not appointed to the role for a fixed period.

“I have never had a term of office – the job has developed as time has gone on, organically, without a structured view of what happens next.  It seems to have worked. The firm has come a long way in that period,” he says.

“My partners gave me the opportunity at an early stage to not have to take responsibility for fee earning on the same basis that they were. I was given the time -and had the energy and ambition- to try and drive the business forward. A lot of firms would not have accepted that. My partners thought  that my skills, such as they are, are better directed towards business development. And I use that in a broad sense. I don’t just mean finding new clients, but thinking about areas that we should be in, people we should try to encourage to come and work here, and thinking about the culture of the business. My first priority has been to take the firm somewhere.

“During that time my role has been to work with the managing partner and Chief Executive, forming a strategy for the business, looking for opportunity for new work and new areas of work, and for new people and managerial opportunities, all while maintaining a very strong client connection.”

It is an approach that seems to be measurably working for the firm. Whilst they have, like most of their peers, been obliged to make redundancies, they have conversely expanded their presence in Dubai where they opened an office during 2008. Such decisions are made by the firm’s managing board, a structure which allows each member to pursue their defined roles, returning to make collective decisions for the firm as a whole.

“I don’t have any autonomous decision making authority. All matters of consequence on the direction of the business comes from the managing board, who run the business. Each person on the board has a role, I get on with my role, they do theirs, and we come together to make sure the firm is financially in the right place, doing the sort of things it should be doing, and thinking of the issues that are currently important,” he says.

Liberation from fee earing has also been a positive step: “We have had a lot of outside influences, people coming in form outside the firm who have had a major influence on the business, with a clear, incisive view of where the firm should go. I found that a great help. My role has developed from being very hands on in the early days, to the role I now have which is much further away from the everyday decision making and running of the business.

“Here, we have a pretty relaxed attitude. We don’t suffer people who like to have tantrums, feel they are extraordinarily important, or have histrionics. We welcome people who are committed to the business, work hard and generally want to enjoy it. People perform better if they go to a job they want to do. It is painfully obvious, but in some firms it doesn’t quite come out that way.

Many of the people who are with us have been with us for a long, long time, since they trained. Before the term work/life balance was coined, we were applying it. We worked hard, but we didn’t go berserk. If we needed more people, we got more people, rather than working every Sunday.”  

McPherson is relaxed and easygoing, and for one described outside the offices of HBJ as one of the most powerful figures on the Scots legal scene (did you know people say that about you Malcolm?) he seems to take the pressure in his stride. Having Sundays off evidently has its upside.