The UK arm of global cider and beer producer Heineken is actively considering going down the one-stop-shop route for the bulk of its legal work, appointing a sole legal adviser in a bid to cut down its external legal spend.
Heineken’s company secretary and UK head of legal Graeme Colquhoun anticipates that one of the firms with which the brewer already has a relationship would be best placed to serve in the role, meaning that firms including Freshfields Bruckhaus Deringer, Allen & Overy, Shepherd and Wedderburn, TLT Solicitors, Morton Fraser, Irwin Mitchell, Osborne Clarke, CMS Cameron McKenna and Pinsent Masons could all be in line for the windfall instruction.
While Heineken does not currently operate a formal panel and tends to keep much of its commercial and procurement work in-house, key relationship partners to Heineken include Freshfields corporate partner Sundeep Kapila, who previously advised brewer Scottish & Newcastle (now Heineken) on the £7.6bn takeover offer by Heineken and Carlsberg, as well as Heineken’s 2011 acquisition of the Galaxy pub estate from The Royal Bank of Scotland for over £400m.
Equally, longstanding adviser Shepherd and Wedderburn has previously acted for the former Scottish & Newcastle over competition matters, including obtaining European Commission clearance for its distribution joint venture with Kuehne + Nagel. The Scots firm also provided Heineken UK with advice on high-value debt recovery, insolvency and guarantee enforcement matters in Scotland.
Colquhoun has previously gone on record to praise the firm, stating: ‘The firm is our first port of call for corporate transactions in the UK and we have an excellent relationship.’
A sole supplier appointment would cover Heineken’s UK conveyancing, licensing, debt recovery, property and litigation work, with corporate deals appointed ad hoc, although in the expectation that the sole supplier would be in pole position.
Speaking to Legal Business, Colquhoun said: ‘Given the strategic importance of the role, it’s hard to imagine going with a firm that we didn’t already know very well. We haven’t yet decided whether to go down this route, but would expect to make a decision over the next few months.’
The single-supplier advisory model has gained modest traction in the market since 2006, when Eversheds announced its market-leading, annual fixed-fee retainer with Tyco International.
However, March this year saw Eversheds win its largest-ever primary services provider contract with the International Air Transport Association (IATA) across 158 countries.
Other high-profile recent examples include Pinsent Masons’ second exclusive fixed-fee contract with energy giant E.ON, which last year appointed the top 20 UK firm as sole legal adviser for general matters.
Other similar deals to have been forged include Baker & McKenzie’s three-year contract with Unilever in 2007 to service its global trade mark and IT work for £10m a year. Bakers then went on to sign an open-ended £10m-plus a year deal with Carlsberg in December 2010 for corporate, commercial and disputes work, followed by a £3m three-year contract with Colt in Europe in January 2012.
Colquhoun added: ‘Our business is very fragmented and distributed – there’s lots of touch points between the business and external firms. Cost is a huge issue and so is control.
‘From Edinburgh it’s quite hard to get a grip on that other than through our system where we can see how much money is being paid but we can’t stop it before it happens. We think we might have better control through having a sole supplier – a one-stop-shop.’