BLP set to agree innovative deal to take on client's legal team

Berwin Leighton Paisner (BLP) is in advanced talks to seal a groundbreaking deal that will see Thames Water transfer the bulk of its in-house legal team to the City law firm.

The agreement, understood to be worth around £5m a year to BLP for the next five years, would see the firm take on 13 of Thames Water's in-house legal team and three administrative staff to carry out all of its longstanding client's legal work.

The work will be handled through a new managed legal services division at BLP that is intended to cut costs for Thames Water, while ensuring BLP picks up the overwhelming majority of the company's legal spend. It is understood that previously around 30% of Thames Water's legal spend went to magic circle advisers such as Linklaters.

Although BLP's Thames Water team would be based with the company in Reading, they would be employed and paid by BLP as part of the deal. Only around seven legal staff are set to remain at Thames Water, including general counsel Joel Hanson, who will focus on advising the board.

BLP is set to conduct all high-value work for the water company including corporate, finance, litigation, planning, employment and property. The firm is thought to be close to securing a deal with regional firms Pannone and Ashfords, which would see the duo pick up lower-value volume work potentially worth some 20% of the company's spend.

Corporate head John Bennett is driving the initiative, which the firm expects could be rolled out to other clients.

Bennett (pictured) said: "This is a paradigm shift for the legal sector. The project itself is very exciting and a win-win-win situation. The client gets guaranteed performance standards, reduced legal costs, budget certainty and greater focus on its core business. There are also significant benefits for the general counsel and in-house team, as well as for BLP."

He added: "This is something that we have been thinking about for a while. It is an innovative solution that would suit big corporates with significant legal spend."

There are no plans for the Thames Water lawyers to transfer to the City.