The Scotsman Scottish Legal Review 2013 has just been released and this year it features a plethora of Turcan Connell experts who were asked to provide comment on their field of expertise.
Private Client: Briefing
Douglas Connell, Turcan Connell
Certainty as to the future is the objective of most clients as they make plans for the passing to the next generation of the family business or other asset. But of course the best laid plans can go wrong, stuff happens and, as Harold Macmillan probably never said,"events, dear boy, events".
The truth may be that there are no certainties and we are living through a period when there are political, fiscal and personal unknowns which can have a major impact on the arrangements made by senior family members as they pass wealth to the next generation.
Advising on succession planning, providing finance for a matrimonial or shared home, handing over shares in the family company or bringing sons and daughters into partnership are all part of the work of private client lawyers. Some of the advice can be focused on the taxation implications of what is proposed and there is always the danger tax considerations may drive a solution which may later be regretted. Knowing the client and developing a long-term relationship become as important as the detailed knowledge of technical tax rules and tax traps.
There is another aspect to the advice which may be more philosophical. Do different generations have character traits and values which distinguish them from their parents and grandparents and can an understanding of such different attitudes help a private client lawyer to advise on the important question of when to pass on assets to the next generation?
The truth is that what counts most is knowledge of one's own children and perhaps the role of the private client lawyers is to use their own experience to remind willing donors that stuff can happen and that gifts of sensitive assets should only be made with one's eyes wide open and with such contingency planning as can be put in place.
Private Client: Article
Douglas Connell, Turcan Connell
With their expectations rising, private clients require a very particular kind of legal service, writes Maggie Stanfield.
Crucial to every legal practitioner in the private client business is relationship building. Perhaps it is because of its concerted effort in this area that Turcan Connell tops the league tables.
Co-founder and senior partner, Douglas Connell, has always emphasised this aspect of the company's activity."We are absolutely determined that our focus on private clients in Edinburgh, Glasgow and in London meets their needs wherever they are," he says.
"Client expectations are higher than ever and there are increasing signs of activity. WE have a good combination of seasoned, experienced professionals and a younger generation of lawyers serving Scots in London. It's been a tough period and our clients have been affected by that. But people can't' wait forever and they know that appropriate financial planning is vital."
Finding encouraging interest rates anywhere is a real challenge. With these at an all-time low, what can Douglas Connell do to help his clients invest wisely?
"The continuing lack of certainty is a big issue for everyone. The threat of the American 'fiscal cliff' continues to be on stage and the volatility of the stockmarket, alongside collapsing banks and currency fluctuations, all make people uneasy," he notes.
"Because we believe in a generational approach to our clients, carrying form one generation to the next, we get to know their approach to risk. Knowing your client is vital. We have an understanding of where they are on their own life path in terms of career, children, buying a house, setting up a pension."
Business of Law: Point of No Return for Some Firms
Douglas Connell, Turcan Connell
Turcan Connell Senior Partner, Douglas Connell comments on the business of mergers and acquisitions as he see more mergers like the McGrigors and Pinsent Masons example occuring in the future. He notes:"This kind of consolidation seems far more likely than further domestic mergers of bigger Scottish firms. It is difficult to see the benefits of amalgamating two large firms operating in the same market place; conflicts of interest emerge."
Connell suggests the demise of Semple Fraser, the shock event in the Scottish legal market in 2013, might not be the last."There is evidence of some Scottish law firms continuing to face major financial challenges – surprisingly high level of debt, pension fund deficits and partners wishing to retire and withdraw capital," he says.
Charities: Well Suited to the Task
Simon Mackintosh, Charities
A major trend in the charities sector in 2013 has been the successful take-up of the new legal status, the Scottish Charitable Incorporated Organisation (SCIO). Simon Mackintosh, who heads the charities team at Turcan Connell, says SCIOs, which confer corporate status on charities but still allow them to be regulated as charities, have gone down well.
"About one-third of the new charities are being formed as SCIOs," says Mackintosh."I didn't expect so many, but it's clearly meeting a need for new charities who don't want to have to go through Companies House and for board members aware of the risks associated with being on a charity board."
Mackintosh says the Equality Act 2010 is becoming more prominent in the work of OSCR, the Office of the Scottish Charity Regulator. The case of the St Mary's Children and Family Care Society in Glasgow, which refuses to adopt to gay couples, has highlighted the issue of the relationship between breaches of the Equality Act and breaches of full charity status.
"I wouldn't be surprised to see that case go to the Court of Session and this kind of issue is likely to happen more," says Mackintosh."I think OSCR might in future look at the Equalities Act as an area where it could carry out a themed review."
Mackintosh believes there is considerable scenario planning around the independence referendum, especially at larger charities with a UK reach. Mackintosh raises OSCR's advice on what charities could and couldn't do around the referendum debate as"very clear and focused", though he says the debate has caused concern to some charities, especially around issues such a funding from UK research councils.
David Ogilvy, Employment
In 2013, the discussion regarding the remuneration of senior executives, led by politicians and business commentators, took on a slightly new dimension.
Most recently, it centred on payments to chief executives and other senior managers of not-for-profit organisations. This follows hot on the heels of the debate which ash been ongoing since the Higgs Report a decade ago about what level of remuneration is fair and about the appropriate basis for calculating reward.
In the aftermath of 2008's troubles in the banking sector, commentators concluded that remuneration strategies must encourage long-term success rather than rewarding"short-termism".
This seems reasonable, but, for long-term strategies to work, it is essential that senior executives whose remuneration depends upon long-term performance have sufficient security of tenure in office to be able to demonstrate long-term success.
In many respects, senior executives are less adequately protected by the law than people in lower-paid jobs. Not only does the cap on the amount of compensation which they might get in respect of an unfair dismissal claim affect them sooner, but the amount of contractual notice which might be considered reasonable for senior executives to receive has decreased to, typically, a year at most. Additionally, the Companies Act 2006 has placed further restrictions on payments to exiting directors.
So, given the limited protection on offer, senior executives whose remuneration consists of retained or accrued elements, perhaps in a rolling three or five-year incentive plan, risk losing substantial sums if the decision is taken to terminate their employment.
In order to be fair to both sides, the intention to reward based upon long-term success needs to be backed by adequate protections to ensure that the executive will survive the troughs for sufficiently long to allow him or her to demonstrate success and reap the rewards.
Family: Splitting the Spoils After the Battle
Alisdair Loudon, Family Law
Dividing the spoils, it seems, continues to be very much a problem for separating couples – and sadly will forever remain as thus.
Alasdair Loudon is head of family law and partner at Turcan Connell. He suggests that there are currently particular issues around sharing out the wealth between co-habiting couples:"This whole area changed a lot in 2006. Up until then, there was the common law myth that if a couple lived together, they were entitled to a half-share.
"The 2006 legislation adjusted that and introduced financial claims for co-habitants, but it did not take in joint ownership of property as matrimonial law does.
"Nor did it divide the money accumulated between the partners. Instead, it looked at the relative advantage or disadvantage to each individual.
"The law has taken a long time to evolve in terms of giving guidance on how to go about quantifying appropriate amounts. There continue to be cases that develop the law in this area but perhaps pose as many questions as they answer."