EDF Energy cuts back UK legal panel by 40% as two firms win new appointments
Energy company brings in fixed fee 'shopping list' as panel is streamlined to eight firms
April 26, 2018 at 04:18 AM
4 minute read
EDF Energy has cut the number of firms on its UK roster by 40%, with CMS and Bryan Cave Leighton Paisner (BCLP) winning new appointments.
The line-up now consists of eight law firms, down from 14.
The other six firms on the panel, all of which been reappointed, are Baker McKenzie, Herbert Smith Freehills (HSF), Pinsent Masons, Eversheds Sutherland, Squire Patton Boggs and Burges Salmon.
Chief legal officer Guido Santi led the review, which began in mid-2017 and concluded in March this year. The new panel arrangement will be in place for a two-year period until 2020.
As part of the review, EDF has also introduced a new approach to assigning work to its panel firms as part of a move away from the billable hour and a desire for greater transparency over legal spend.
The company has collated a list of tasks, known internally as its 'shopping list', for which it is most likely to instruct external law firms, and asked each firm to provide it with fixed fees in relation to each task.
Santi said: "This means that when we are presented with these tasks, we are able to assess if they are worth outsourcing, and what we will need to budget for. We expect this approach will reduce negotiations on fees and means that our panel firms can spend less time and resource preparing quotes and responses to mini-tenders, so it should be a win-win."
He added that the company has been working on an efficiency drive against a backdrop of "fast-evolving industry challenges, such as a very competitive market for energy providers, a proposed cap on standard variable tariffs, a challenging wholesale energy market and Brexit."
He said EDF had reduced the legal panel as it felt a smaller number of panel firms would help it get "effective, strategic legal advice, and cost efficiencies". The company occasionally goes off-panel for specialist advice, or as a result of conflicts.
The previous panel line-up also included Clifford Chance, Dentons, TLT, Osborne Clarke, Veale Wasbrough Vizards, Kennedys, Weightmans and Foot Anstey, all of which have come off.
On the panel process itself, Santi said that innovation was a crucial part of the assessment. "We included specific sections in our requests for proposal asking for information on technologies and processes that could be used to support us. We have been very clear with our panel firms that we would like to cooperate in the work they are doing to improve their own processes."
EDF said that CMS and BCLP's shared focus on innovation and technology had contributed to them winning spots on the panel.
EDF also asked firms to demonstrate the efforts they are making to improve diversity and inclusion, and requested evidence that they have plans in place to make their workforce – at all levels of seniority – "more reflective of the UK population".
In recent years, HSF has taken a lead role for EDF on the Hinkley Point C nuclear power plant project, fielding a team of more than 30 lawyers, and last year the firm's head of power and renewables Julia Pyke moved over to become EDF's GC for nuclear new build businesses.
Santi and Pyke work alongside legal affairs director and company secretary Joe Souto and Claire Gooding, legal affairs director for generation and corporate. Principal solicitor Ashley Hofman and solicitor Kate Chow also played a key role in the panel review process.
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