30 October 2000
When the Millennium Commission was set up under the 1993 Lottery Act, everybody knew that it would not last. That was the whole point. Designed to mark the end of one millennium and the beginning of another, its role is to distribute millions of pounds of lottery money to worthwhile projects around the UK.
There are about 3,000 projects being supported by the commission. They range from being as big as the Millennium Dome to as small as a dry-stone wall in Yorkshire. But whatever they are, it is unlikely that they would have been able to obtain funding from anywhere else. "These are all projects that the property market wouldn't dream of funding," says Jerry Michell, head of corporate at the Millennium Commission.
Set up in 1994, the commission has no in-house lawyers. The corporate department, which takes responsibility for legal matters, has five staff, all of whom have backgrounds as chartered surveyors.
Michell explains: "Because we don't have in-house people here at the commission, we see ourselves very much as the interface between the commissioners who award the grants and the lawyers. We can interpret what commissioners are aiming to achieve, and instruct the lawyers accordingly."
There are high risks involved in the projects, but Michell believes that this is axiomatic and to be expected of the work they do. "Projects sometimes find themselves in rather shaky circumstances," he says. "That shouldn't be surprising. Clearly, there will be circumstances from time to time when we need to take a proactive role in helping to get the projects back on the rails."
Situations can arise at a moment's notice and the commission needs law firms that can respond instantly at a decent price. "We've got to deliver these projects on time," stresses Michell. "So lawyers can't hang about."
And when more than 60 firms applied for the tender, they knew exactly what they needed. "We identified the things we were looking for," explains Michell. "Value for money was an important one, and breadth of experience, because they're dealing with a very wide range of areas here, not just property matters or capital allowances. There are charity issues, intellectual property issues and some rather more unusual things like transport, works act orders and that sort of thing."
The commission is funded by lottery players' money. Roughly 28p of every £1 paid for a lottery ticket goes to good causes, and 5p of that goes to the commission. As it is "public money", its allocation has to be a very careful process. Michell says: "We're conscious all the time that this is lottery players' money, and we think it is very important that lottery players do see where every 28p in the pound goes."
Any firm whose fees were set too high would have had obvious difficulty finding its way onto the panel. In the end, six firms were chosen out of the original contenders: Berwin Leighton, Burness in Scotland, Dickinson Dees, Freeth Cartwright, Lestrange & Brett in Northern Ireland and Lewis Silkin. Of these six, Berwin Leighton and Lewis Silkin had already been used by the commission, with the former being involved from the very beginning. Not that this had any effect on the final decision. Michell says: "It's fair to say that Lewis Silkin and Berwin Leighton have acted for us for rather longer anyway. There were value for money arguments in reappointing them, but it was a strictly competitive situation. If they'd over-quoted on fees, then they wouldn't have been on the panel."
This selection provides an obvious national coverage, but noticeably absent from the panel are any of the major City firms. Michell says: "Of those 60 firms that applied, there were some big names. Their hourly rates, to be honest, didn't make it sensible value for money. It won't surprise you to find out that provincial lawyers come at cheaper hourly rates than those from the City firms."
As regards specific figures, Michell is keeping quiet. But he is confident that the savings are significant. "They're only a fraction of the scale fees," he says. "I think the commission has been pretty good at driving legal fees right down, to really quite a modest rate."
But it is not just price that attracted the commission to its panel of six. A human approach was also needed. Michell says: "A lot of these projects are run by people in their spare time, and so the objective is not to face up to these projects and adopt an antagonistic approach. It's about guiding them and helping them through the process rather than taking a confrontational standpoint."
Of the 3,000 projects currently on the go, the commission is responsible for only about 200 of them. Many of these, however, are umbrella organisations, which divide the money up and give it to smaller interests that they might not otherwise get involved with. Grants are generally about 50 per cent of the total cost of the projects, and to date about £1.25bn has been handed out, giving the commission a capital projects portfolio of roughly twice that amount, something Michell sees as an attraction to law firms. "The lawyers on our panel make themselves available to us at very short notice. On the other hand, they know that with around 200 projects - some of them pretty complex - there's a useful flow of work coming their way," he says.
Generally, all firms take a share of the work and often single projects can be split between two or more. But with the larger projects, Michell believes that things should be dealt with by one party alone.
"On something like, perhaps, a canal or a forest, we make sure the work is spread around among the lawyers," explains Michell. "On some of the larger projects - like the Millennium Stadium in Cardiff - the Land Assembly and some of the other issues involved were so complex that to have changed lawyers halfway through would have been completely counter-productive."
With such a relatively large panel on board, it would be easy to imagine all the work being farmed out. However, it is not until the very last minute that the lawyers are brought in, as the commission prefers to deal with issues first-hand as much as possible. "We look for practical solutions and then think about the legal aspects afterwards," says Michell. "We tend to like to do the problem-solving here in this office."
While having their external legal advisers instructed by chartered surveyors would seem strange to many companies, to the Millennium Commission it is the perfect arrangement. "We have a very good working relationship and we think the idea of having surveyors interpreting the project to the lawyers seems to be a good method."
Michell worked as property director at Legal & General for four years before moving to the Berkeley Group. From there he moved to the Millennium Commission, where he finds the work increasingly satisfying. "There aren't just commercial considerations here, we feel that we're doing something for the community. Particularly at the lower end of the scale, you can see very direct benefits going back to the community. It really makes shops, offices and factories seem rather dull by comparison."
Person responsible for legal and head of corporate department
The Millennium Commission
|Organisation||The Millennium Commission|
|Sector||Quango (Quasi Autonomous Non-Governmental body)|
|Person reponsible for legal||Jerry Michelle, head of corporate department|
|Reporting to||Douglas Weston, director of projects|
|Main law firms||Berwin Leighton, Burness, Dickinson Dees, Freeth Cartwright, Lestrange & Brett and Lewis Silkin|