Balfour Beatty hands Pinsents ‘business as usual’ work in cost-cutting drive

Infrastructure giant Balfour Beatty has selected Pinsent Masons as its sole legal advisor for all its ‘business as usual’ legal work in a radical overhaul of its panel arrangements.

chris vaughan balfour beatty
Chris Vaughan

As first reported by The Lawyer earlier this year (23 January 2013), general counsel and chief corporate officer Chris Vaughan has revamped the way the company is using its external advisers, in a bid to cut costs and manage legal risk more efficiently.

Pinsents has been appointed to undertake all of Balfour Beatty’s day-to-day legal work, including minor litigation, construction contracts, employment and property work. Meanwhile the company’s existing panel, which includes Allen & Overy, Berwin Leighton Paisner, Eversheds and Linklaters as well as Pinsents, will be brought in on a case-by-case basis for complex and business-critical work.

Vaughan has agreed a fixed fee with Pinsents for all the business as usual work, which is bundled together. The fee is dependent on “continuous improvement and the law firm driving efficiency”, he said.

“One thing that we’ve noticed over the years is that despite the fact that we did all the right things and put panels in place, tried to negotiate really good discounted hourly rates and imposed fixed fees where we can, the legal spend across the company wasn’t really coming down,” Vaughan told The Lawyer. “I started wondering whether there was a better way to outsource our legal work.”

He said the deal would see junior lawyers at Pinsents doing much of the work, as well as making more use of secondees and the other “value-add” services firms often provide to their clients.

Vaughan added that he hoped the deal would enable him to spend more time looking at the reasons why Balfour Beatty might find itself in an employment tribunal or in a contractual dispute, and manage the legal risk involved in such cases better in order to cut the number of claims and the cost they incur.

The process of putting the new panel arrangements in place did not involve a panel review, but firms already on the panel as well as those which do not regularly advise Balfour Beatty were invited to pitch for the “business as usual” package.

Pinsent Masons was competitive on price and they had a good innovative approach to it,” Vaughan said. “We had very much a meeting of minds with them about the benefits for us and them.”

He said he thought the approach being taken by Balfour Beatty to instructing external counsel would be taken up by other companies in the future.

“This is a much more commercial way of procuring legal services,” Vaughan added.

Pinsents has advised Balfour Beatty on various issues for over 35 years.