Now that Tyco and Eversheds have taken their genuinely ground-breaking partnering deal to the next level, it is increasingly clear how much the two have riding on it being a success. But the key question, as much now as ever, is whether Eversheds can make the deal profitable. Given the details that Tyco has released regarding the relationship, it will certainly require the national giant to execute the work with efficiency and skillful project management on a scale and to an extent that is highly unusual in legal services.
Eversheds is expected to put in around 25,000-30,000 hours a year for a mandate set to generate around £5m annually, aside from three performance-driven bonuses. Given that Eversheds is also expecting to provide between four and five secondees to Tyco, down from a year one commitment of eight, that is no mean feat. And the turbulence of the relationship in its first year has done nothing to silence the sniping from critics that the deal is unworkable (though 11 major law firms thought it workable enough to pitch for the original tender). Matters were not helped by an initially strained relationship between Tyco and adviser as Eversheds buckled under the strain of its trophy client’s workflow. Part of that initial problem is that Eversheds was, to a certain extent, selling a product that didn’t exist. It has been said before but the much-touted partnering models like DuPont that Tyco had been compared with are really little more than pretty standard panel arrangements. One rival partner observes that “you either sell the sausage or the sizzle”, arguing that Eversheds was better on selling sizzling style rather than delivering meaty substance.
