Berwin Leighton Paisner (BLP) is finalising a major deal with Thames Water that will see the utility company transfer its legal function over to the City firm.
Under the terms of the deal, which is expected to be worth in the region of £5m per year to BLP, around 15 Thames Water lawyers will be employed by BLP’s new managed legal services division.
BLP was initially appointed to Thames Water’s panel two years ago following a beauty parade and since then has taken care of 15-20 per cent of its legal needs, according to relationship partner Patrick Somers. This has included being sole adviser on the £2.5m Thames Tideway project.
Under the new arrangement BLP will also swoop on work previously undertaken by other panel firms. These are understood to have included Allen & Overy, Ashurst, Denton Wilde Sapte, DLA Piper, Freshfields Bruckhaus Deringer and Linklaters.
“With this model we’re able to say that BLP’s embedded in the business,” asserted Somers. “Other models such as LPO take you a certain way, but [they] don’t necessarily do what clients want, which is complete alignment.”
Asked whether BLP had the capability to undertake the entirety of Thames Water’s legal work, Somers responded: “The client thinks that we have the capability. BLP has added all the capability of a top City practice. We now have a securitisation practice, for example, and Linklaters handed over Thames Water-related securitisation work to BLP in the last few weeks. It’s the largest securitisation in the City.”
However, BLP is aiming to focus on strategic matters for the client, referring the more run-of-the-mill matters to regional firms under a Lovells-style Mexican Wave structure. Discussions are underway with Ashfords and Pannone to carry this out.
Thames Water general counsel Joel Hanson will not be part of the group joining BLP, remaining at his employer alongside the company secretariat and a small group of dedicated lawyers who will assist in giving advice to the utility’s board. Somers said there would be no redundancies as a result.
He added that the deal was able to create major efficiencies for the client. “If you’re going to run a legal team you have to spend a lot of your time making sure it’s mentored properly – it can take 30 per cent of your time. In an ideal world a GC would be a trusted adviser to the chairman and board. One of the benefits is that the GC is freed up. This [also] removes duplication and gives further career opportunities for the Thames Water lawyers.
“Lawyers in that division will be rewarded on a separate basis to how they’re currently remunerated and how lawyers at BLP are paid. They’ll be paid differently, but not necessarily less,” he commented.
The new managed legal services division has been in the offing for a year and is led by director Stephen Allen.
“We’ll be doing more of these deals,” said Somers. “But we’ve got to make sure it’s designed in the right way for our clients. We can’t pull it off the shelf.”