Legal Business Blogs

CC hits Newcastle for surprise takeover of Carillion’s volume legal arm

Get your Magic Circle-meets-Geordie Shore quips ready as Clifford Chance (CC) has made a surprise acquisition of Carillion’s pioneering in-house legal arm.

The Newcastle-based business Carillion Advice Services (CAS) was put up for sale following the collapse of its Wolverhampton-headquartered parent in January in one of the largest UK insolvencies for years. Carillion filed for liquidation after talks with its creditors and the government failed to reach a deal on Carillion’s £1.5bn liabilities.

The transfer was announced today (14 February) for an undisclosed sum, though it is safe to assume it was picked up at bargain rates. CAS has a team of about 60 paralegals who specialise in services such as document review, due diligence, e-disclosure and litigation support. The business will be fully integrated with CC. CAS director Lucy Nixon will report to CC’s client service solutions global head Oliver Campbell, as well as UK managing partner Michael Bates.

Bates said that CAS would provide cost-effective, efficient service on low complexity legal tasks to support its core clients. CC has previously handled support work through its own centre in India or third party providers. Bates added: ‘The addition of the team in Newcastle, with their well-recognised expertise in unbundling, developing processes and applying the latest in legal tech, will enable us to provide clients with another option from within the firm.’ Campbell said: ‘They bring a huge amount of expertise in areas that are already an important priority for the firm, such as legal tech and process-driven service delivery.’

CAS was inherited by Carillion in 2011 as part of its £300m acquisition of energy services company Eaga, providing services to Carillion and external clients. Carillion’s own in-house legal team had about 30 staff.

While the move of one of the City’s largest law firms into Newcastle would once have looked incongruous, recent years have seen many leading firms set up low cost centres in cities like Belfast, Glasgow and Manchester to respond to client pressure for efficiency.

The transfer of CAS follows the sale of Carillion’s UK power framework business for an undisclosed sum last week, to engineering and construction company J Murphy & Sons. Murphy took on 22 former Carillion employees as part of the transaction, in which they were advised by Addleshaw Goddard.   DLA Piper is acting for the Official Receiver for Carillion, while Dentons’ restructuring partners Nigel Barnett and Neil Griffiths have also been advising the liquidator since Carillion’s collapse.