First Law

Cosying up to clients

Law Society Gazette - Thursday 8th February 2007

Extract from a feature article by Cameron Timmis

Anthony Armitage, director of legal services tendering company First Law, has been involved in several public sector tenders where a partnering arrangement was negotiated – which he defines strictly as an exclusive deal based on a fixed fee or annual retainer. He cites two examples: the General Medical Council, which has an agreement with City firm Field Fisher Waterhouse to conduct its disciplinary cases (the fees are based on a fixed cost per 100 cases), and Daventry District Council, which has an exclusive agreement with Cambridge and Northampton firm Hewitsons.

While Mr Armitage sees significant advantages in partnering arrangements for public sector clients – budget certainty and being able to demonstrate ‘best value’ – in practice, he says, putting a deal together is a complex task: ‘The reason we’ve been able to do it is because the clients in both cases kept a reasonably good record of expenditure in the past. It was relatively easy to look back at that and see a pattern of work.’

Without high-quality information, says Mr Armitage, parties entering a partnering agreement could expose themselves to big risks: ‘For the law firm, the risk is clearly that the work is more than they anticipate, so they end up incurring more costs and not recovering the fees. For the client, the risk is that the [cost of] the retainer is over the top for the work. I think most clients would like to do it, but they just don’t have good enough information on historic expenditure to make the calculation.’

Equally, says Mr Armitage, ‘the blame often rests with the law firm for not supplying good enough information about its fees’.

Author: Cameron Timmis