Race is on to win place on Taylor Woodrow panel
11 November 2002
15 November 2013
2 June 2014
9 October 2013
27 March 2014
5 June 2014
After The Lawyer revealed last week that Taylor Woodrow was about to review its panel, you may have been thinking about trying your luck. Several of you already have, but for those still to make that cold call, save yourselves the trouble - the closing date has passed, and across the country those property practices invited to compete by group general counsel Jeremy Sampson are waiting with baited breath for the next stage in what promises to be an eventful review.
CMS Cameron McKenna and Eversheds, the group's main property advisers, are both taking part. Hammonds, Mills & Reeve, Walker Morris and Wragge & Co are also understood to have relationships with Taylor Woodrow.
The stakes are high. Taylor Woodrow spends around £6m a year in legal fees for its commercial property and housebuilder activities. The general consensus is that the FTSE 100 client will be shaking things up in line with the major reorganisation of its business now underway. When the group issued interim results that were at the top of analysts' forecasts in September, newish chief executive Iain Napier announced a realignment of the business into one company to get rid of its reputation as a 'mini-conglomerate'. The reorganisation is expected to achieve annual cost savings of £21m next year, so lawyers bidding will have to have a few cost-saving tricks up their sleeves. It also involves the loss of 180 jobs.
In addition to streamlining the management structure and consolidating three divisional head offices into one in Solihull, Taylor Woodrow plans to integrate its commercial property and construction arms much more closely with its main homes division. It is an approach that will help Taylor Woodrow in its growing focus on brownfield and mixed-use schemes - a direct response to Government policy.
With such complex schemes already forming a growing part of the group's UK portfolio, it is small wonder that lawyers were beating down Sampson's door last week.
History would seem to suggest that, as with its business strategy, Taylor Woodrow is not afraid to take dramatic steps when it comes to getting its legal function right.
Back in 2000, it offloaded its two solicitors for commercial property to existing adviser Camerons. That deal is understood to have guaranteed Camerons all commercial property work for a fixed period.
For Taylor Woodrow, the arrangement was part of a cost-cutting exercise. For Camerons, it has been a major success. The range of transactions has not only included commercial property, but also high-grade residential development work for Taylor Woodrow Capital Developments. Taylor Woodrow counts among the top billers for Camerons' real estate department, which last year brought in £23.5m.
Sampson is believed to be considering outsourcing in-house staff again, leaving himself as the key contact with external advisers. One issue that could arise in the current review is whether Camerons' streamlined property practice would be willing to put on extra weight this time round. The department is perceived as having lost some of its old clout within the firm, so will its corporate and finance colleagues be willing to let it make such an investment?
More recently, Taylor Woodrow's acquisition of rival housebuilder Bryant has shaken things up. While Taylor Woodrow still had an in-house legal capability for housebuilding, Bryant was virtually unique in the sector in its preference for outsourcing. A key recipient was Eversheds' Birmingham office, which had an historic exclusivity arrangement with Bryant. Although it looked vulnerable at the time of the Taylor Woodrow acquisition, Eversheds has held on to its relationship since then, albeit not on quite such an exclusive basis. Wragge & Co, for example, recently advised Taylor Woodrow on Bryant's acquisition of a 78-hectare (93-acre) brownfield site sold by the Ministry of Defence in Hampshire.
At Eversheds, Taylor Woodrow joins an impressively long list of housebuilder clients, including Bellway, Berkeley Group, Crosby, Fairclough, Redrow and Wilson Connolly.
Eversheds is now understood to work on almost half of Taylor Woodrow's plot sales, work that goes hand-in-hand with land acquisition, while the rest is split between in-house and other external advisers. Among Eversheds' current residential schemes is Taylor Woodrow's £130m Macintosh Village, comprising 710 residential units.
Both Eversheds and Camerons are ideally placed for the holistic approach Taylor Woodrow wants to take as it targets mixed-use developments.
The Camerons team, led by Nick Brown and Mark Heighton, is currently understood to be acting for Taylor Woodrow on Baltic Quay, a major mixed-use £100m regeneration scheme on the banks of the River Tyne in Newcastle, and on its urban regeneration project in Portsmouth city centre.
Other mixed-use schemes on Camerons' books are Bristol Harbourside for Nicholson Estates and Gunwharf Quays in Portsmouth for Berkeley.
The Eversheds rundown includes acting for the Birmingham Mailbox on The Mailbox scheme, Deansgate in Manchester for Crosby and the Bull Ring for the Birmingham Alliance, comprising Hammerson, Land Securities and Henderson Global Investors. It has less experience on Taylor Woodrow's mixed-use schemes, but has been acting for the Bryant and Persimmon consortium on Newcastle Great Park, a massive greenfield development.
With Camerons and Eversheds taking the lion's share of Sampson's legal spend on the back of historic exclusivity arrangements, he is no doubt keen to put the two on a more competitive basis. He says he is keeping an open mind in terms of the model he will eventually arrive at, but those in the running will be hard-pressed to better the Camerons and Eversheds offerings to win themselves a greater share of the work. They have until January to impress him.