British Gas shake-up sparks legal bonanza

A MAJOR review of external legal services is under way at British Gas which will result in millions of pounds worth of legal work up for tender this summer.

Some of the City's top firms which already act for British Gas on a project-by-project basis are likely to be invited to participate, as well as multi office national firms offering a wide geographical spread.

These are understood to include Herbert Smith, Linklaters & Paines, Denton Hall, Eversheds Jaques & Lewis, Ashurst Morris Crisp, Allen & Overy and DJ Freeman.

The review is part of the company's rolling programme, involving the shedding of 25,000 jobs and restructuring into five business units in response to deregulation and increased competition in the gas market from 1996.

Charles Twiss, British Gas legal director, says: "Cost becomes a pre-eminent consideration for all companies, but effectiveness, quality, and value for money are equally important. We are seeking to develop closer relationships with our external lawyers to ensure this."

The review and tendering will involve work on the five business units: Global, Exploration and Production, Business Gas, pipeline company Transco and Public Gas Supply.

Separately, lawyers are currently tendering for British Gas Property (BGP), a new central function set up to handle all property-related matters previously dealt with by the 12 regional offices, which are due to close by the end of this year.

The BGP work is split between "operational" (buying and selling property) and "development" (construction, environmental and planning).

Angeline Swift, BGP solicitor and legal manager, says more than 24 major firms tendered for the operational work and 9 were shortlisted for interview. Winners - at least two firms - will be announced soon.

Tendering for development work begins after Easter. Three top firms already acting for the company will be invited to re-tender.

* Denton Hall has lost half its British Gas business to Ashurst Morris Crisp.

The legal work for Public Gas Supply (PGS), worth at least u3/4 million a year, went out of the door with energy group partner Paul Griffin who left to join Ashursts last week.

Denton Hall keeps client Transco. The firm can now pick up new gas supply companies without any potential conflict.

Ashursts' senior partner Andrew Soundy says the firm recruited Griffin for his qualities rather than for PGS business.