Rise of the Tyco Model

At the start of 2007, Tyco International reduced the number of its external legal providers across Europe, the Middle East and Africa from 250 to one; Eversheds. 12 months on, Nina Goswami of TheLawyer.com reports that Eversheds has become the sole provider to six other companies including Samsung and Akzo Nobel.

The secret to Eversheds’ success? A system for general counsel that breaks down their company’s legal spend by country, jurisdiction or practice area. “As any general counsel will tell you, the way to keep the boss happy is to give them an accurate projection of the legal spend,” says Goswami.

Interestingly, the selection of DLA Piper to provide global legal services to Linde (replacing 150 law firms) was also in part based on DLA’s commitment to invest in technology to be integrated with Linde’s existing knowledge systems.

So, how are other firms going to react to the growing demands of large corporates for increasingly comprehensive, integrated solutions to their global legal problems?

WiredGC provides a neat assessment: “Some firms are no doubt looking at 2008 with trepidation. A few may think that the answer is raising rates or pushing fee-earner utilization (i.e., hours billed) higher. What Tyco-Eversheds shows is that such firms are not facing squarely what is going on in the global corporate legal services market.”

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