Eversheds: how to set new client standards

I was jazzed a year ago when Eversheds struck a deal with Tyco to become the service and manufacturing multinational’s primary outside counsel, reducing Tyco’s complement of law firms for most legal matters from 250 to 1. Those who doubted the wisdom of the arrangement at the time worried that Tyco would miss out on other firms’ offerings and would suffer from Eversheds’ inevitable sense of complacency, while the firm would be at a greater risk of business-losing conflicts. Even when international gas and engineering giant Linde struck a similar deal shortly afterwards with DLA Piper, there was still uncertainty over this kind of approach.

Well, one year on, says The Lawyer, Tyco is still partnering with Eversheds and singing its praises, especially since the firm must get Tyco to sign off on every legal task it performs on the client’s behalf in order to get paid for it. So how did Eversheds do? Today, it’s now sitting on no fewer than six similar arrangements with other companies, each of which looked at the Tyco deal and were impressed by what they saw. Now other London-based firms are trying to emulate Eversheds’ approach, including Hammonds and Pinsent Masons. So I’d say, on the whole, that this has been a pretty successful undertaking so far.

What really impressed me here, though, is how Tyco’s partnership with Eversheds indirectly helped bring the six other companies on board. When Eversheds first proposed the present arrangement to Tyco, it proffered two cutting-edge software programs: Dealtrack, a budgeting and cost management tool, and Rapid Resolution, a project management application for litigation. But Tyco wanted more: it wanted a way to precisely estimate the total amount it was spending on its legal services company-wide.

Eversheds rose to the challenge and integrated Dealtrack and Rapid Resolution into a more powerful new program called the Global Account Management System (GAMS). “The system breaks down a company’s legal spend by country, jurisdiction or practice area, providing a heat map [of] where money is being either wasted or used efficiently,” says The Lawyer. But there’s more to it than even that.

One of GAMS’ side effects has been to require consistency of service across all Eversheds offices, to make these cost estimates possible. That, in turn, has required global standardization efforts firm-wide and outsourcing of some tasks to less-costly offices, all of which is like catnip to clients. GAMS has been the key to allowing Eversheds to conclude its other Tyco-like client arrangements — but GAMS itself might not have been developed but for Tyco’s encouragement. And that is what you call a lawyer-client partnership.

What I like most about all this, however, is that Eversheds (and similarly innovative firms in the Magic Circle) is setting new standards for client service that other firms must now match. It’s a truism in the automotive industry that every luxury eventually becomes a standard feature: air conditioning, power steering, CD player, satellite radio, etc. By giving its clients a glimpse of several holy grails — cost certainty, fixed-fee arrangements, task control and service level guarantees, among others — Eversheds is turning a once-unattainable luxury into a standard element of its service delivery model. That’s not just a competitive advantage for Eversheds; that’s good news for clients everywhere.

Clients are going to get spoiled, and they’re going to start asking other law firms why they haven’t introduced similar measures. Eversheds’ London competitors are on the case right now, but so far, I don’t see their counterparts in the US or Canada moving to keep pace. Their mistake, if so.