Global CC axed for Ashursts

British Midland is axing global giant Clifford Chance for a smaller firm in the belief that it will receive a "better service".

The UK's second-biggest scheduled airline used Ashurst Morris Crisp for the first time last week when Scandinavian Airlines Systems sold its 20 per cent stake in British Midland (BM) to German airline Lufthansa for £91.4m.

BM's head of legal Tim Bye says: "We decided we were going to look for someone new for this transaction.

"We went through a review of possible advisers, had a small beauty parade, and decided Ashursts were the best fit for what we needed.

"I am not a particular fan of global firms. We will probably get a better service from a smaller [firm] and a more focused approach for private companies."

BM will retain Harbottle & Lewis for aviation issues and Derbyshire firm The Smith Partnership for property matters.

But it will not be using Clifford Chance, the world's second biggest firm, for corporate work again.

Says Bye: "I think it is likely [Ashursts will be retained]. We are very happy with them and the work they have done for us.

"We have treated this as a test for them and there is a fair chance they will become our regular corporate adviser."

A year ago Bye significantly slimmed down the amount of law firms the company used.

He says: "There was not really a formal panel. There seemed to be an awful lot of external firms doing a lot of work for us without a clear view of who did what."

Corporate and competition partner Roger Finbow led the Ashursts team on the Lufthansa deal. He confirms the 87-partner practice was invited to pitch for the work and adds the firm "hopes to get more work from BM".

Bye says cost was not an issue in the beauty parade, adding the two firm's fees were "remarkably similar". Instead the choice was made because he felt Ashursts was a firm the company "could work with".

The Lufthansa deal has caused a furore in the aviation industry. British Airways chairman Robert Ayling attacked the sale, claiming BM was "under German influence".

In a further blow to 332-partner Clifford Chance, BM's chairman Michael Bishop has also hinted the privately-owned company is interested in flotation.

Clifford Chance was unavailable for comment.