Land Securities has appointed Herbert Smith Freehills and Hogan Lovells to its revamped legal panel following a year-long review that ended in January. The largest commercial property company in the UK now has nine external law firms on its roster.
Group general counsel and company secretary Adrian de Souza has organised his law firms into two main panels, with Berwin Leighton Paisner, Eversheds, Freshfields Bruckhaus Deringer, Hogan Lovells and Nabarro placed on panel A, while panel B comprises Dundas & Wilson and Herbert Smith Freehills. There is also an additional specialist panel that contains Allen & Overy for finance and Clifford Chance for corporate work.
According to de Souza, a firm is typically placed on panel B for a number of years until it has fully learned the processes and procedures of the company.
De Souza has only been in the job since 2010 and was immediately charged with slashing the number of firms used from more than 100 down to nine. Firms that have come off the roster since then include Linklaters, DLA Piper, Slaughter and May and SNR Denton.
‘The goal was to make sure we had the best lawyers and that we were going to be a good client,’ said de Souza. ‘We want to make sure that our relationships are profitable for our law firms.’
De Souza couldn’t be accused of rushing into the review. The questionnaire that formed part of the tender process was a year in the making and comprised just ten questions, to avoid the likelihood of firms sending in huge amounts of information or ‘brochures’ as he termed them. The questions ranged from gender diversity compliance to complex tests on development issues, including the right to light, tunnels and railways.
‘The goal [of the review] was to make sure we had the best lawyers.’
Adrian de Souza, Land Securities
One of the questions focused on how de Souza wants his firms to operate – having an overall view of Land Securities’ business rather than operating in silos. ‘We said “Don’t tell us what you do at the moment because we know that – focus on the other areas of our business which you might be able to work with”,’ said de Souza. He singled out Nabarro as having handled this question particularly well.
Land Securities also asked firms to provide a figure for the percentage of their turnover derived from real estate in 2007 compared to the last fiscal year. This showed de Souza how a firm’s real estate practice has recovered from the pre-bust to post-financial crisis period as well as its commitment to the practice area, which is where Herbert Smith Freehills excelled.
‘For us there was only a 1% difference, which illustrates the strength of our real estate practice,’ said Don Rowlands, head of the UK/EMEA real estate practice at Herbert Smith Freehills.
‘We’re delighted to have got on the panel. Land Securities is exactly the sort of client we aspire to work for and look forward to building the relationship over the next few years,’ he added.
One of the main reasons that Hogan Lovells made it straight on to panel A is due to the firm’s prowess in real estate litigation, an area where the company had a deficiency according to de Souza. This is despite Nabarro being instrumental in Land Securities winning a £100m case over a compulsory purchase order in Cardiff at the end of seven years of litigation.
With a legal spend of £20m, it is easy to see why firms were jostling for places on the panel. De Souza said that Nabarro remains his number one go-to firm, which means he spends three times as much with them as he does with the other panel A firms, around £6m.
With the next panel review not planned until 2016, de Souza already has plans to streamline his panel further. He wants to have just four firms on panel A, so the pressure is on for the current firms to outperform each other in this market.