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Partner, Head of Pensions Litigation
When Mercer, one of the world's leading financial institutions, decided to re-think its approach to supporting the legal requirements of its business, it wanted a fresh perspective. Working in partnership with Pinsent Masons, it was able to develop a forward-thinking approach to legal resourcing and re-focus the in-house team on value-adding matters.
Following a period of market change, Mercer recognised that it could be overwhelmed by a high volume of operational work, and become unable to deliver the strategic value expected of a modern, commercial, legal function.
Like many legal departments, the Mercer team faced a significant volume of legal risk issues within which there was a spectrum of complexity. Some issues could be quickly and easily processed. Others, without expert handling, could quickly escalate and create a significant financial exposure, particularly when aggregated.
In the past, a typical solution might simply have been to outsource these matters, or create a large in-house team to service the work.
However, it was clear in this case neither of those models would be efficient, cost-effective or sustainable. Something more creative and collaborative was needed.
Working together, Mercer and Pinsent Masons devised a new, progressive way of working which fundamentally re-calibrated the traditional ‘client / adviser’ relationship.
Pinsent Masons and Mercer had a relationship dating back a number of years. The two organisations worked together to take their collaborative working approach to the next level.
What was required was the certainty of a fixed fee combined with the flexibility to accommodate an uncertain risk profile. As Lisa Tolaini, Chief UK Legal Counsel at Mercer reflected, “I am not a great believer in fixed-fee arrangements…because there is always the risk that people work to the fee. On the other hand, I want the certainty of knowing how much I am going to be spending, as managing the budget is a key function of ours.”
In conjunction with relationship partner Isabel Nurse-Marsh, a new model was devised, the principal components of which were:
This new, distinctive way of working fundamentally moved the relationship away from hourly rates. It also provided the flexibility for creative legal thinking which can be inhibited by a strict fixed-fee model.
Chief UK Legal Counsel, Mercer
Isabel’s team have such a depth of understanding of our business that they understand the nature of the work they are doing, and they understand the pressure that individual is facing. Pinsent Masons is one of the most innovative firms in this area.
The programme has been a major success. In addition to driving greater cost certainty and value in external spend, the programme has freed up the legal function to take a more strategic role; it now regularly advises on issues such as new product development which really contribute to the bottom line.
Lisa Tolaini sums it up: "Isabel’s team have such a depth of understanding of our business that they pick up the phone and they know the person they are talking to, they understand the nature of the work they are doing and they understand the pressure that individual is facing. Pinsent Masons is one of the most innovative firms in this area."