MoD ditches three from PPP law panel

Herbert Smith, BLP and Pinsents lose out in panel review; Eversheds wins place

Herbert Smith, Berwin Leighton Paisner (BLP) and Pinsent Curtis Biddle have all lost highly coveted places on the Ministry of Defence (MoD) panel for public-private partnerships work after a lengthy review process.
The panel was cut from 14 to 12 firms, with Eversheds making it on to the list for the first time. The panel now comprises Addleshaw Booth & Co, Burges Salmon, Denton Wilde Sapte, DLA, Freshfields Bruckhaus Deringer, Eversheds, Masons, McGrigor Donald (now merged with KLegal), Shepherd & Wedderburn, Simmons & Simmons, Veale Wasbrough and Wragge & Co.
The MoD has a vigorous and expanding PFI programme. To date, some 39 projects have been signed and a further 50 are in various stages of development. The MoD spends £450m per year on charges for PFI alone, a figure expected to rise to more than £1bn by 2007. Its legal fees typically run into hundreds of thousands of pounds per project. The work involved covers property, construction, IT, intellectual property, facilities management, financing and leasing arrangement and employment.
Not surprisingly, all 14 members of the old panel are understood to have retendered. As well as being valuable in itself, a relationship with the MoD carries crucial weight with private sector clients looking to engage in defence projects.
The panel was first formalised five years ago, but this time contracts have been awarded for four years. The MoD has its own in-house lawyers seconded from the Treasury Solicitor, but set up a panel for PFI schemes because of the specialist legal skills required. After winning a place, panel firms also have to compete with each other for instructions on individual projects.
A spokesman for Herbert Smith said: “We've consciously sought to rebalance the focus of our practice so that we now act in equal measure for the public sector, private sector and financiers. Our relationship with the MoD reflects the practice's historical public sector strengths. It has been a good relationship and one we'd like to maintain outside the confines of its panel.”
Spokespersons for both Pinsents and BLP said their firms continue to work for other central Government departments and agencies. BLP's head of finance Simon Allan said he does not believe the decision will jeopardise the firm's defence work for private sector clients.
Eversheds' appointment to the panel is an impressive coup for the national firm. Head of projects Stephen Matthews said that growing the firm's work for central Government is a key strategy. “This was a target for us,” he said. “We felt we had all the right experience, notwithstanding the fact that we'd not worked for the MoD before.
“We also demonstrated that we were alive to concerns about the procurement costs involved in these projects.”