Telecoms and engineering giant Marconi is extending its panel to include cheaper non-City firms for the first time.
The company spends around £10m a year in the UK on legal fees – a large chunk of which will now be spent outside the City.
Head of legal Jeff Gordon tells The Lawyer he is talking to four regional firms with the aim of developing “a more meaningful relationship with one or two firms outside of London”.
But Gordon confirms he is in talks with Wragge & Co, DLA, Eversheds and Pinsent Curtis to cover the bulk of legal work. He adds: “For work like employment and property, [regional firms] may be better than a City firm because they do more of it. But there is also an expense element.
“City firms need big-time assignments to justify their rates, but beyond the big deals they might not be the obvious choice.”
Birmingham stalwart Wragge & Co is the first to benefit from Gordon’s intention to use cheaper firms outside the City.
It recently beat off two City firms and one other regional firm to represent Marconi on its move to a new site in the West Midlands.
The firm will provide property and construction advice for the one million square foot building and 148-acre site.
Wragge & Co has acted on a handful of small jobs for Marconi but this is its first major transaction.
Client partner Richard Haywood says regional firms are able to steal a march on their City rivals, particularly on fees.
He adds: “We invite FTSE 100 companies to think of having a magic circle firm for the glossy work and then to think of us for the less than glossy work. The relationship then develops and we move up the food chain.”
The General Electric Company changed its name to Marconi late last year. The FTSE 100 group has a market capitalisation of £21.9bn.
The London-based group maintains manufacturing operations in Africa, Asia, Europe, the Middle East and the US.
Gordon joined last summer from Mayer Brown & Platt’s London office, where he was senior partner.
He had been with the US firm for 27 years (The Lawyer, August 1999).