Costain prestige for Pinsents, Addleshaws and Bevan Brittan
18 February 2008
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Talk to the lawyers on Costain's new panel and they are quick to tell you how much fun it is to work for the UK's oldest builder.
Not only are the executives a thoroughly nice bunch, they say, but representing them is "hugely enjoyable".
Its legal spend is modest at around £1.5m a year, but Costain brings with it the prestige of being one of the country's most recognisable brands and the chance to work on vast construction projects - such as the new international rail terminal at St Pancras. It was therefore no surprise to see firms queuing up to compete for a place on the new panel.
"We had a lot of diverse relationships with a lot of people," says Costain head of legal Tracey Wood. "I wanted to concentrate on a smaller number of firms. We wanted to get a closer relationship with those law firms - and by giving them a large volume of work you get a better price."
The legal revamp was as part of a new 'supply chain' strategy by the Costain group that means fewer suppliers and greater efficiency across the board.
The three major winners, as The Lawyer reported last week (11 February), were Addleshaw Goddard, Bevan Brittan and Pinsent Masons. Slaughter and May remains as Costain's adviser on company law, having handled a number of one-off acquisitions and disposals.
Costain's two most longstanding advisers both found places in the new setup. Pinsents has enjoyed a close relationship with Costain for around 15 years, building on the historic construction expertise of the Masons practice.
And Slaughters has represented the firm since the early 1980s, when another client recommended that Costain use the firm.
Corporate partner Andrew Jolly handles M&A and equities work, with partner Richard Hall on finance.
Jolly says: "They're an important, longstanding client. We always keep close to clients and keep the relationship strong. We can only see it growing."
Last year Slaughters advised Costain on a rights issue, raising around £60m for the company. But is Slaughters' position as corporate adviser set in stone? The panel firms currently deal mainly with operational issues such as health and safety, employment, litigation and dispute resolution.
Bevan Brittan partner Chris Jarman readily admits that he would like to expand his firm's role, saying: "There must be an awful lot of corporate work that they do where we'd offer better value for money than Slaughter and May. We're as good and we'll be a little cheaper."
Bevan Brittan was first instructed by Costain on a PFI project in 2002 over the construction of care homes in East Kent.
Addleshaws was the most surprising addition to the panel. The firm had never acted for Costain before winning a place in the competitive tender, although it had advised other builders on joint projects.
It worked on both the Manchester Waste scheme and a £750m project for Southern Water, building a strong relationship with Costain managing director Dave Jenkins.
Indeed, Costain sees the firm as a market leader in the water sector. Partner Nigel Proctor reveals that the firm's regional offices in Leeds and Manchester helped seal its place, adding: "The fact that there's a national offering no doubt was a factor."
Pinsents, a longstanding adviser to Costain, took a team of five to pitch for the role. Those five will continue to work almost exclusively on the account, underlining the importance of the client. The firm will be the first port of call for employment issues, along with Reading-based Blandy & Blandy.
Pinsents head of construction Richard Laudy says: "The expertise we have in construction and engineering is still recognised, but what's very pleasing is that our knowledge in other areas is recognised as well. More recently the relationship has developed into procurement as well as dispute resolution."
Costain's push for greater efficiency has inevitably left a number of firms out in the cold. CMS Cameron McKenna has links to the company dating back to the early 1990s and the pre-merger days of McKenna & Co. In 2006 Camerons partner Trevor Butcher advised Costain, as part of a consortium of other bidders, on an M25 widening project. But there was no place for the firm on the new panel. Likewise DLA Piper, which represented a partnership including Costain on the Three Shires NHS building scheme last year, and Lovells, which was called to advise on the Hungerford Bridge project.
Costain will hold a formal panel review every three years, giving Camerons and others a chance to bid their way back in. Wood will assess each firm on a quarterly basis and hold annual reviews on performance and price. With efficiency and cost such important values, the door is by no means closed to other firms with their eyes on one of the UK's most sought-after construction clients.