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Newcastle firm Crutes has lost its long-standing client, the North East Ambulance Service, to Eversheds after more than 20 years.
Eversheds' Newcastle office was the winner of the five-year contract, which is due to start on 1 July, after beating off competitive tenders from Ward Hadaway, Dickinson Dees and the incumbent Crutes.
Crutes acted for the ambulance service in its former guises as the Northumbria and Durham Ambulance Services, and remained as legal adviser to both services when they became independent trusts in the early 1990s.
However, in April this year the two trusts merged to form the North East Ambulance Service and at that point the contract was reviewed.
David Henry, partner in the health unit at Crutes, says: "Naturally the firm is disappointed. But there is still on-going work to take on, as not everything is transferred over as part of the tendering process."
Alison Holmes, contract services manager at North East Ambulance, stresses that there was no dissatisfaction with Crutes' service.
She says: "We realised that since we had become a trust in 1991 we had not been out to see what legal services were on offer on the open market.
"We would not be doing our job properly if we did not see what other firms were out there."
David Weatherburn, health and insurance partner at Eversheds, says: "This is not a reflection on Crutes but arose because the ambulance service contract had never been out to tender."
Weatherburn also states that it is unusual for a contract to run over five years - the normal timespan for NHS service agreements is three years.
But Holmes says: "This follows the guidance from the Government on 'best value purchasing', which prefers that organisations such as ours have long-term arrangements with contractors. Also, legal cases tend to go on for long periods of time, so we went for a five-year contract."
The ambulance service has no in-house legal team. Weatherburn says the contract includes all legal work for the ambulance service, including clinical negligence, employment and procurement work.