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Party for one: E.ON appoints Pinsent Masons as its sole UK adviser

The single-supplier legal advisory model appears to be gaining traction as Pinsent Masons has won its second exclusive fixed-fee contract this year, with energy giant E.ON appointing the firm as sole legal advisor for general matters, a first in the energy sector.

The terms of the arrangement mean E.ON’s UK legal function will reduce its roster of legal advisers to just one. The five-year deal will ‘encompass work across a full range of specialist legal services,’ a statement said today (3 Oct).

E.ON’s current in-house UK legal team will continue to carry out a significant proportion of work, while the energy group’s central legal function (based in Dusseldorf) and specialist legal teams, such as City-based E.ON Exploration & Production UK will retain separate panels, including a small number of UK firms.

The news comes after Pinsents revealed at the end of March that it had won the contract to supply all of infrastructure giant Balfour Beatty’s business-as-usual legal work.

The latest deal is a major coup for the firm and a sign that the certainty, cost effectiveness and relationship benefits of the single supplier model – which had yet to take off after the initial interest surrounding Eversheds retainer with Tyco in 2006 – is growing in popularity among clients.

Graham Line, Head of UK legal at E.ON UK, said: ‘This is an exciting and innovative partnership, not to mention a first in the UK energy sector. The legal function at E.ON has a prominent role to play in ensuring that our customers are treated fairly, and giving the business confidence as it makes infrastructure investments that are helping to keep the lights on now and in the future. We want to deliver a high-quality, high-value service to the business, and Pinsent Masons demonstrated through their approach and knowledge of the sector that they are the right partner to achieve that.’

Pinsent Masons partner Jonathan Fortnam (pictured) who led on the deal, added: ‘E.ON is an impressive business which plays a vital role in the UK energy market. This arrangement will allow us to support them through the provision of a broad spectrum of specialist legal services, and give us the ability to develop the type of long-term, sustainable relationship that is key to true partnership.’

The advisory model pioneered by Tyco International six years ago saw the Swiss security group cull its roster of 250 law firms to just one.

Other similar deals to have been forged in recent years includes Baker & McKenzie’s three-year contract with Unilever in 2007 to service its global trade mark and IT work for around £10m annually. Bakers went on to sign an open-ended £10m-plus a year deal with Carlsberg in December 2010 for all corporate, commercial and disputes work, followed by a £3m, three-year contract with Colt in Europe in January 2012.

For more in-depth analysis on the single-supply model, see Three steps forward… will Tyco-style deals ever sweep the market?