Eversheds secures multi-million pound fixed-fee IATA deal

Eversheds has secured a multi-million pound contract with the International Air Transport Association (IATA), the airline trade association, rolling out its existing mandate to include Europe, North Asia and Asia Pacific.

The extended contract gives Eversheds sole responsibility for IATA’s legal project management in 158 countries, adding 93 countries to the initial remit.

Eversheds secured its first three-year deal with IATA in April, when it was handed the contract for Africa and the Middle East (20 May 2013).

That contract saw a dedicated team led by global client development head Stephen Hopkins appointed on a fixed-fee basis, with 15 per cent of the fees retained and paid at the discretion of IATA on a performance-related basis.

IATA’s first review of the firm was launched at the end of last year and is believed to have resulted in payment of the discretionary 15 per cent bonus, prior to the firm pitching to have its remit extended in early January.

IATA general counsel Jeffrey Shane said: “We have high expectations of Eversheds.  The goal of IATA’s legal department is to be on the cutting edge in delivering support to our offices around the globe.”

He added that Eversheds had performed to his expectations in Africa and the Middle East. The terms of the new contract had been “tweaked” so that 10 per cent of the fees will be retained and a 10 per cent bonus handed over to the firm if it exceeds contractual expectations.

IATA will grade Eversheds’ against a set of key performance indicators in April and October of each year.

The assessment criteria include: how well the team understands the subject; responsiveness; efficiency; hitting budgets; level of legal expertise, and the quality of the execution of the work.

Shane said his first instinct when putting the three regions out to tender was to stimulate competition by giving one or more of the new regions to another firm.

“I had guessed that Eversheds would probably get one or two more regions, but I hadn’t expected that, after the interviews, we would decide to give them all three,” he commented. “However in retrospect it may not have worked for a firm to get just one region – this kind of contract needs critical mass to be mutually beneficial so I’m not actually sure that firms would have agreed to take on less than two or three regions.”

Shane was clear that both parties were aware of the enormity of the contract and the pressure was on Eversheds to deliver affordability across the board. He said: “They know enough that if they stubbed their toe and failed to deliver it would be a real negative come evaluation time.”

Hopkins added: “One of the key elements of this contract is the use of non lawyer project managers, one in the UK and one in Singapore, to ensure delivery of the consistency across all 158 countries.”

In April Eversheds renegotiated its longstanding fixed-fee contract with US manufacturing company Tyco (26 April 2013).It took the firm three years to reach an annual fixed-fee arrangement with Tyco but Hopkins predicted after the first IATA appointment that it would only take 12 months with IATA because it has more experience of centralised billing and estimating fixed fees after Tyco.

The relationship with Tyco kick-started several of the firm’s sole advisory contracts with companies such as Samsung and Akzo Nobel (28 January 2008).