Ashursts the loser as British Telecom gets tough on fees

Ashurst Morris Crisp’s relationship with British Telecom (BT) was bedevilled by a row over fees prior to the firm’s exit from BT’s panel, The Lawyer can reveal.

The firm advised BT on its massive £2.3bn property outsourcing in 2001. It is understood that a problem with Scottish stamp duty meant that the deal was not completed as quickly as first anticipated and resulted in an escalation in Ashursts’ fees – thought to total up to £8m.

Freshfields Bruckhaus Deringer was the other main adviser to lose out on the panel review. Addleshaw Goddard, Allen & Overy and Wragge & Co, however, were added to existing advisers Bird & Bird and Linklaters.

It is understood that fees were a key issue on the pitch. “Fees were the biggest if not the only issue for BT,” said a source close to the process .

It is understood that the regional firms pitched on the basis that much of the work could be done from offices outside London.

A BT spokesperson denied that fees were the only consideration, but admitted that the company had looked for firms that had an “innovative and competitive” approach to fees.

Conflicts are also thought to have played a big part in the tender process.

It is understood that Lawrence Graham was turned down because it is the primary adviser to Telereal, the joint venture to which BT sold its £2.3bn property portfolio.

Similarly, it is thought that Freshfields lost out because of the work it does on mmO2, as well as the fact that it refused to discount on fees.

Ashursts property head Ian Nisse declined to comment on the matter, saying: “I won’t listen to your questions.”