Dentons tries not to be left on the shelf for Sainsbury's work

Sainsbury’s’ establishment of its first formal panel in over a decade may be cause for muted celebration for appointee Denton Wilde Sapte.

The supermarket chain’s decision to include Dentons in a streamlined formal panel of 11 demonstrates a recognition of the work the firm has undertaken, as well as its commitment to the client during a relationship spanning more than four decades.

Nevertheless, the fact that Dentons is still there, and relying on the Sainsbury’s relationship for a sizeable chunk of its property practice, also underscores the firm’s vulnerability as rivals muscle in on its traditional territory.

Dentons’ relationship with Sainsbury’s originates with its predecessor Herbert Oppenheimer Nathan & Van Dyke, back when J Sainsbury was still a relatively small operation. For decades Oppenheimer was the sole appointee, but as the organisation expanded rapidly in out-of-town provision during the 1980s, it brought on Denton Hall as well.

The merger in 1988 between Oppenheimer and Denton Hall left the chain feeling exposed and Lovells was instructed so that it could hedge its options better. Nevertheless, Dentons was still the firm favourite at the time, undertaking the vast majority of the work.

As the supermarket has grown and its in-house capability has become more sophisticated, corporate reviews have been accompanied by formal legal reviews.

The first of these was in the mid-1990s. Lovells lost out, Dentons continued on board. But while it remained at the side of a growing organisation, its period as preferred adviser had truly come to an end. The chain has sought advice from 20 or so firms over the past decade. Half have not survived the latest cull, but at least three are scooping English and Welsh work from Dentons.

These are Addleshaw Goddard, through relationship partner Derek Tolley; CMS Cameron McKenna, through Nick Brown; and LG, through Rabinder Chaggar. All three have well-established relationships with the chain. Camerons and LG are less significant because they just handle property work, but Addleshaws, like Dentons, is dual-appointed on property and commercial matters.

Mirroring the series of mergers that has seen it grow aggressively at a national level, Addleshaws has also moved up the ranks in terms of the nature of the work it handles.

This has moved from being purely property-focused, built upon relationships stemming from both pre-merger firm Booth & Co and the contacts brought by ex-Dentons lawyer Clive Jenkins. Although it is true that the relationship is still managed by property partner Tolley, the past few years have seen Addleshaws undertake increasingly more commercial and corporate work. Advice on the joint venture with Shell UK, which saw Sainsbury’s expand its presence in forecourts, is a notable example.

Addleshaws real estate head Michael Reevey says being a national firm works in its favour when it comes to winning work. “When we look at rates we agree with Sainsbury’s - inevitably the lower cost base of our northern offices is to our advantage,” he says.

Although traditionally a City firm, Dentons has fought back with the use of its Milton Keynes office. “There’s no reason why London should do high-level work,” clarifies real estate relationship partner Andrew Bedford.

The firm for its part has undertaken some big-ticket commercial work. Last year IT and commerce partner Scott Singer advised on the ’Project Squadron’ joint venture with HBOS. It worked alongside current panel corporate and competition adviser Linklaters, which is led by head of corporate David Barnes.

But being just another respected panel firm may not be enough for Dentons, which might prefer to be the apple of head of legal services Nick Grant’s eye. “For many years we’ve been a very close adviser,” says commercial relationship partner Singer. “The pitch is a fantastic opportunity to demonstrate our ongoing relationship and move closer to a trusted adviser role. Life is a changing thing.”

Sainsbury’s certainly recognises that, as a number of its recent moves illustrate. These include the enhancement of its in-house capability through the appointment of heads of property Katherine Kinch and commercial Damen Bennion, as well as instructing new appointee Shepherd & Wedderburn to act as a one-stop legal advice centre as it seeks to gain ground from rival chains north of the border.

But does Dentons? It has in the region of 40 lawyers working on the account in property alone - albeit not all in full-time roles. This is around twice what a firm such as Camerons does and almost twice what Dentons itself did two decades ago.

Of course, this may also be indicative of the fact that the quality and complexity of work has increased with time, but with formal panel reviews now taking place every three years, Dentons’ future with Sainsbury’s has never been more uncertain.