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The groundbreaking Tyco/Eversheds relationship continues

In Spring 2009, one of the most pressing priorities for Tyco's deputy general counsel EMEA was the renewal of the engineering giant’s multi-million pound revolutionary contract with international law firm Eversheds.

The decision to renew has just been taken and Eversheds and Tyco have signed a multi-million dollar extension of the groundbreaking agreement that continues the relationship for a further two years.

David Symonds says he was always keen to renew the deal given the time and effort both sides have committed to making the relationship work. Tyco has been pleased with a 27 per cent reduction in legal spend and an astonishing 60 per cent drop in the number of disputes it has had to endure in its litigation portfolio.

“As a legal team we are handling litigation better. It’s a combination of our legal structure, having the right lawyers in the right places and consolidating the work with one law firm. It’s easier to monitor cases when one firm is dealing with all of them,” explains Symonds.

The deal has evolved to such an extent that many of the contract’s original demands have been ditched to recognise the evolution of the Tyco-Eversheds relationship. Tyco has simplified the contract to revolve around a fixed fee hourly rate with no bonuses built in for drops in litigation or rises in client satisfaction or diversity.

“I thought the previous contract was complicated. It has served a purpose in that it has driven the right behaviours,” says Symonds, “but ‘bonus’ is a dirty word at the moment.”

Symonds explains that the response from the business people he supports is that "If my financial director were to suggest that any request for a bonus should be paid, because the law firm has done X, Y and Z and achieved targets, then this request would be met with the response that the firm is just doing the job that it is paid to do, so why should it get a bonus."

Likewise, says Symonds, it was difficult to allocate such bonuses across Eversheds international operations covering 80 jurisdictions. Both sides were keen to make the new contract as simple as possible.

Tyco had previously and still reserves the right to use an alternative law firm for strategically important mergers and acquisitions or IP or litigation but as the relationship has progressed, Eversheds has benefited from a 300 per cent increase in this type of work. Now over 50 per cent of the work that Eversheds does for Tyco is outside the basic contract. In addition, IP prosecution has been added to the deal this time around.

“In the early days, the extent of the innovation was a challenge for all our offices" says Eversheds’ Tyco relationship partner Stephen Hopkins. “All firms were required to fundamentally shift the way they worked and move away from traditional billing methods. But now every office is seeing the benefit.”

Tyco is one of Eversheds’ biggest clients  in many of its international offices. Symonds makes special mention of the firm’s Azerbaijan ally and their ability to provide Tyco with a consistent service over the geographic area he covers. “Everywhere we’ve been, Eversheds has had an office or firm to help out,” he says.

Both Hopkins and Symonds attribute many of these changes to Eversheds’ unique and industry leading GAMS software.

“Eversheds ensure that everything is approved on GAMS before doing the work,” states Symonds, “otherwise they won’t get paid.” 

“This is anathema to most lawyers. It was a material cultural change for the business. The mindset of our lawyers has had to change, but now we’ve achieved that focus, there is no doubt that we are the only law firm that can offer a seamless international service wherever a client needs advice in the world,” concludes Hopkins.