Is big business turning its back on the conventional legal panel? This month at least sees two prominent examples, with listed infrastructure group Balfour Beatty extending and revamping its sole supplier partnership with Pinsent Masons as banking giant Barclays unveils its final global panel review.
Pinsents today (5 March) announced its sole supplier mandate with the FTSE 250 company had been re-signed until 2020, the second extension to a deal which kicked off in April 2013. The latest partnership, however, has introduced new pricing structures for greater flexibility.
Variable fixed-price arrangements have been implemented for routine projects rather than a single, capped fee for all business-as-usual matters, as was the case previously. Pinsents’ routine work will also generate credits which can be offset against legal spend on more complex work also handled by the firm. These credits could also be used for advice on the design and implementation of legal process technology.
Pinsents infrastructure partner Colin Fraser is the new relationship partner on the deal, which was spearheaded by Pinsents’ head of client strategy, Alastair Morrison, and Balfour Beatty general counsel (GC) David Mercer. Fraser commented: ‘We look forward to working in tandem with the Balfour Beatty legal team to redefine what blue-chip organisations can expect from their legal spend in innovation, value and cost certainty.’
Mercer added: ‘We’ve unlocked significant value for Balfour Beatty through our partnership approach and remain committed to driving continuous improvement. We are now working together on tech-led innovation blending legal service provision, in-house engagement and business system integration that is changing the way we do business and helping us to lead in this challenging market, not least in extracting maximum value from every legal pound spent.’
Pinsents also has a single-supplier mandate with energy giant E.ON for a five-year term. There have been a number of high profile sole-supplier deals, including Eversheds Sutherland with Tyco and Turkish Airlines and DLA Piper with Merlin Entertainments.
Barclays, meanwhile, confirmed a long-anticipated move to phase out conventional legal panels in favour of a more ‘dynamic’ model when its last global panel expires in mid-2021. The banking giant has launched its final formal panel review, which will run on a three-year term from 1 July 2018. Barclays’ previous review in 2016 slashed the number of firms used from between 350-to-400 to less than 140. At the time, external engagement head Stephanie Hamon said the industry was getting hung up on the word ‘panel’.
Hamon’s team has worked over the past two years to develop a new framework for more active management of Barclays’ counsel. Key changes included setting defined expectations against which firms were assessed, phasing out hourly rates, focusing on effective fee arrangements and developing deeper relationships.
The handover led to the bank’s decision to eliminate the laborious process of full panel review procedures. Barclays’ new approach would give the bank more flexibility in managing the size and composition of the firms it uses, adding and removing them when needed.
Hamon commented: ‘Panel refresh processes are not supporting what we want to achieve. What we really want is for our relationships to be a win-win partnership and for all of us to develop, thus helping the legal industry to evolve at pace.’