Challenge to Lovells, Berwin Leighton and Camerons as Allen looks around
Life insurance giant Prudential is to review its legal outsourcing for UK property investment work for the first time since setting up its panel 10 years ago. Prudential Property Investment Managers (Pru-PIM) is the UK's largest institutional property investor. Its longstanding advisers are Lovells and Berwin Leighton Paisner. More recently, CMS Cam-eron McKenna won a place on the panel when PruPIM took over the Scottish Amicable Insurance Fund. PruPIM is a major client for any property practice. It now manages 10 funds ranging from around £20m to more than £8bn. PruPIM regularly transacts in excess of £1bn a year and manages more than 7,000 tenancies. It also invests in limited partnerships, joint ventures and property derivatives. PruPIM outsourced its legal work 10 years ago following a beauty parade. Since then, it has generally given work in the west of the UK and the London suburbs to Lovells and in the east and City to Berwin Leighton, now Berwin Leighton Paisner (BLP). Bob Allen, director of PruPIM's property secretariat, said: "The past 10 years have seen lots of changes to our business and the legal market. We're kicking the tyres now to make sure the way our legal services are structured is appropriate to the general changes that have taken place. We are certainly not unhappy with our current suppliers." He plans to review the structure before deciding whether to hold a more formal tender process. Cost and quality will be key aspects of the review. "We've seen that accommodation costs and salary costs are on the up for City firms," he said, adding that he would not rule out the addition of a regional firm to the panel in order to curb costs. Allen will also consider whether to adopt a fund-based rather than geographical division of legal work. The move to review legal service provision coincides with PruPIM's decision to use subcontractors, such as DTZ, to supply operational management services for some of its properties.