Ladbrokes bets on change with major panel review and end to hourly billing

Gaming company cuts panel from 50 to 22 firms and extends appointment terms

Gaming group Ladbrokes has completed a sweeping overhaul of its external counsel that slashes its adviser roster, marks a major departure from hourly billing and deploys technology to bolster efficiency.

Slaughter and May, SJ Berwin, Clyde & Co and South West firm Trethowans are among the primary appointees to the FTSE 250 company’s legal panel.

The review, which extends appointment terms from two to four years and reduces the number of firms from around 50 to 22, was led by Ladbrokes general counsel, former SJ Berwin partner Jonathan Adelman. More than 50 firms pitched for work, with each submission averaging more than 10,000 words.

Ladbrokes also appointed eight firms to cover a wide range of work comprising Freshfields Bruckhaus Deringer, Harold Benjamin, Burness Paull & Williamsons, Jonathan Rose, Onside Law, Reed Smith, Dickinson Dees and Gateley.

Ten other firms will also sit on the panel for specific areas, such as gaming specialists Harris Hagan, Olswang and DLA Piper, as well as new appointee BrookStreet des Roches, which will advise on real estate matters.

“There’s a mix of firms on here who have been long-term supporters, and those who have really impressed us,” Adelman told Legal Week.

Previous roster appointees Ashurst and Berwin Leighton Paisner did not make the list owing to client conflicts or the departure of relationship partners.

When pitching for work advisers had to demonstrate a “granular approach” to alternative fee arrangements, with Ladbrokes requiring all appointees to move away from hourly rate billing by 1 January 2015, the half-way point of the four-year panel.

Ladbrokes also developed a ‘value menu’ during the process, allowing the in-house team to measure the added value that firms could provide.

Adelman added: “We had a stated and strong desire to work with firms that would be truly dedicated to Ladbrokes. The process was not about hammering down hourly rates; we wanted a longer-term, more holistic approach to deliver long-term value and savings.”

Part of this approach has seen the deployment of enhanced technology, including an e-billing and law firm appraisal system developed by TyMetrix, to assess firms according to various criteria, hold regular measurable account meetings and forecast legal spend.

Adelman attributes improved IT, together with investment in Ladbrokes’ in-house legal team, with a 30% reduction in aggregate annual legal spend since 2009, despite having to handle twice as many matters in 2012.

Ladbrokes’ stance also reflects a greater willingness on the part of clients to push for robust terms to control costs amid a subdued global economy.

Legal Week’s 2012 Client Satisfaction Report, based on responses from more than 1,200 major companies, found a sharp drop in average external legal spending and, in addition, that half of clients now express a preference for fixed fees over hourly billing.

Adelman joined Ladbrokes in 2008 when the company was using around 100 law firms, later reduced to around 50 advisers following a 2010 review.

Click here for a Ladbrokes profile on Legal Week Reports.