Eversheds deal" />TYCO has signed up for the second year of its groundbreaking $10m (£5.14m) deal with Eversheds, with a number of new innovations added to financially reward good performance and diversity achievements.
Eversheds is set for six-figure bonuses if it achieves a 35 per cent improvement in client satisfaction and if litigation against Tyco drops by 15 per cent.
Tyco’s Europe, Middle East and Africa general counsel Trevor Faure told The Lawyer: “We’ve designed something that eliminates the zero-sum game and replaced it with a profitable partnership.”
Eversheds will win the same bonus if it meets eight challenging diversity targets, including: if more than 25 per cent of Eversheds’ 2009 partner intake are women (in 2008 the number of women promoted dropped from a third to 23 per cent); if more than 10 per cent of its 2009 trainee intake are from black and minority ethnic (BME) backgrounds; and if more than 10 per cent of Eversheds’ staff are BME.
Eversheds’ Tyco relationship partner Stephen Hopkins said: “It demonstrates to our entire business that this is an important issue to our clients and that’s a very powerful motivator.”
The new deal was signed despite a crisis in April 2007, when four months into the deal Eversheds was nearly fired for failing to cope with the influx of new work.
“There was a proving period when their systems hadn’t fully assimilated the 783 cases from 283 law firms across 28 countries,” said Faure.
Since then Eversheds’ Global Accounts Management System (Gams) has become fully operational, helping to integrate all Eversheds’ international offices and the firms it uses where it does not have a presence.
The new deal was signed following an analysis of the 2007 data. All basic work, such as contracts, employment, product liability and IP, is completed for a fixed fee, which is only just profitable and expected to amount to 10,000 hours. If it comes in at less than that, Eversheds gets a bonus.
Litigation is handled on a blended hourly rate with a 25 per cent success fee and a 10 per cent failure penalty. Eversheds will handle all of Tyco’s company secretarial work outside North America, which is worth around $1m (£510,000) in fees. It will also handle major projects, such as the recent restructuring and the $88m (£45.23m) sale of Ancon.