Why the Nike Alliance is a legal trendsetter
10 March 2014 | By Joanne Harris
Sports giant Nike sets out to be a trendsetter in the world of sport and fashion. In legal circles the global retailer, which generates global revenues of $25bn annually, is again helping to set new trends by choosing an alliance of independent firms to cover its European legal needs over a single international firm.
As a multi-billion dollar business Nike is one of those clients that demands attention. When it kicks off a panel review, as it did last year, its advisers sit up and listen. When an insitutional client like this says it wants more cooperation between its lawyers across different countries, firms need to accomodate those demands.
Through its demands for greater cooperation between firms with a more unified approach, the sports retailer sparked a lightbulb moment at Dutch firm Kennedy Van der Laan.
The end result? The Customised Alliance, an alliance of 21 firms across 17 jurisdictions all working for Nike. They include Charles Russell, Spanish big-four firm Gómez-Acebo & Pombo, France’s August & Debouzy, and Taylor Wessing’s German offices.
Kennedy Van der Laan partner Martine de Koning says the company’s request for proposals made it clear that it was looking for a more unified approach to legal services for Europe. Aware that the firm was at a disadvantage as it is only in the Netherlands, de Koning began looking for other independent firms which Kennedy Van der Laan could team up with to present a single pitch to the client.
“We realised we were up against single-brand firms and what Nike wanted was a one-stop-shop,” de Koning tells The Lawyer.
Over the course of 18 months, more firms were brought into the alliance, agreeing to offer a flat-fee rate to Nike across the jurisdictions, as well as consistent working procedures. The alliance is managed from Amsterdam by a dedicated team and the firms get together to share information and best practice.
“We stay abreast of the latest developments in the legal field, as well as the relevant developments within the client’s company and its markets,” adds de Koning.
“Establishing a Nike Alliance means being able to retain the firms that most fit Nike’s needs in each jurisdiction, gaining efficiencies, driving convergence and increasing spend predictability. In addition, the Alliance for Nike is a powerful catalyst for our European legal team talent development,” European general counsel Fabrizio Mecozzi says.
Of course Nike is not the first company to go down this route. Construction support services giant Carillion has operated a ‘Carillion Network’ for a number of years, asking its panel firms to operate collaboratively in a bid to improve efficiency. Talking to The Lawyer last year (17 June 2013), Carillion general counsel Richard Tapp said the network was one of the ways which enabled his team to work more effectively.
Tapp says it is good to hear of others taking a collaborative approach.
“We know from our own experience in Carillion how well collaborative innovation can work, and it’s really encouraging to see these law firms come together in this way,” he says, adding that the sharing of resources should bring benefits for both Nike and the firms involved.
Another group with a similar approach to offering legal services is global network First Law International, which pitches itself to general counsel as a single point of contact with 65 countries covered - again, a flat fee is involved.
From the private practice perspective, international alliances have been a prominent feature of the landscape for years. It’s generally expected that if Slaughter and May, for example, wins an instruction on a deal which also involves a European jurisdiction, one of its ‘best friends’ will be brought in. Others are following in Slaughters’ footsteps, such as the quartet of top-20 European firms which teamed up just over a year ago (26 November 2012) to combat the internationals’ dominance.
The collaboration between Nike and the alliance led by Kennedy Van der Laan, however, is different - with the network being set up especially to serve the sports giant.
Such alliances nevertheless are competing against the big internationals for spots. Much has been written in the past year or so about the companies like Balfour Beatty (25 March 2013), Colt (20 January 2012), Eon (3 October 2013) and most recently the International Air Transport Association (3 March 2014). All have chosen a big international firm as their sole or main legal provider, operating across a number of sectors or countries, with fixed fees a key part of the deal.
But moves like the Nike Alliance have the potential to shift general counsels’ thinking away from these global models. They offer the same fixed fee appeal, but, lawyers like de Koning say, more flexibility. The Nike Alliance is currently looking at adding capability in Eastern Europe and the Balkans. This, De Koning points out, is something which a ‘single-brand’ international firm cannot do so swiftly - it is arguably much easier to tailor the offering when you have a pool of independent firms to pick from and can meet a particular specialist need.
Kennedy Van der Laan is keen to roll out its model to other clients.
“We’re interested in getting more clients interested,” says de Koning. She adds it would be “logical” to use a similar list of firms as for the Nike alliance, but this would necessarily depend on the type of company and its specific needs.
With cost, efficiency and globalisation now the watchwords for the vast majority of in-housers, the chances of encouraging others to at least have a look at the alliance model - rather than always plumping for the single firm with the closest coverage to what your company can offer - seem good.