Balfour Beatty calls Pinsents for legal back-up: BLP misses out again
Balfour Beatty’s decision to use Pinsent Masons for all its business-as-usual work, reported in The Lawyer last week, was a big win for Pinsents. The scrum of firms – as many as a dozen, according to one source – licking their wounds after losing out on the mandate is testament to that.
In that scrum was Berwin Leighton Paisner (BLP). The firm had attempted to woo Balfour Beatty general counsel Chris Vaughan with its Managed Legal Services (MLS) arm that takes over a company’s in-house legal function for a fixed price. Sources close to the deal say Pinsents snatched it from BLP by offering to do the work at a similar price, but using its own lawyers.
And this is not the first report to reach The Lawyer of MLS losing out. Earlier this month a proposed deal with Yorkshire Water was said to have fallen through, while deals with Buckinghamshire CC and Colt Technology Services also stalled.
Indeed, while the MLS team works for various clients the only company to bring it in wholesale is Thames Water, which signed a £5m-a-year deal with it in March 2010, not long after it was created.
Most agree MLS is a solid concept but it requires a lot of investment from BLP – in 2012 the firm hired former Fujitsu director Andrew MacNaughton as MLS chief executive – and the market still seems to need convincing of the business’s merits.
One source suggests this is because asking general counsel to let a law firm run their company’s legal function is like asking turkeys to vote for Christmas. BLP partner John Bennett, who ran MLS at its inception, disagrees.
“[General counsel] are in the business of managing risk,” he says, “and MLS should enable them to tailor something fit for purpose.”
Bennett concedes that there is a lot of conservatism in the legal industry and the firm is having to search hard to find general counsel “brave enough to do this”, but adds that the world is moving in MLS’s favour, with companies looking to drive down legal costs.
“The UK has always been at the forefront of new ways of buying and delivering services – why not in legal?” he asks.