Editors' Blog

BPP regains the prize…but at what cost?

Posted 9/08/2007 by Deal Comment

The robotically upbeat responses of the law schools that missed out on the City LPC consortium contract last week suggest there was never much doubt about who would win it.

Even before the multi-million pound contract was awarded to existing provider BPP Law School (Legal Week, 2 August), other bidders had privately suggested the tender was more about keeping BPP on its toes than a genuine desire to see what else was on offer.

It is possible to understand their frustration. Those pitching were not asked for fee details, an unusual move that led to debates about what the consortium wanted to achieve and suggestions that the group was just testing the market.

This has greater implications for BPP than the firms involved – Freshfields Bruckhaus Deringer, Slaughter and May, Norton Rose, Lovells and Herbert Smith – as the law school may well have been forced to make concessions to ensure it retained its prized role.

Rumours regarding the pitch have been fuelled by secrecy, with consortium members reluctant to admit that the contract BPP has been awarded will last for three years.

What is not in doubt is the significance of the contract. Had the College of Law won the bid it would have made it the exclusive LPC provider to nearly three-quarters of all major UK law firms with these deals, including the entire magic circle. That would have been a result that many argued would have been bad for competition in a market that is fast consolidating around a handful of providers.

For the other bidders, Bristol and Nottingham, the contract would have meant instant credibility in the City for late entrants to the ‘firm-specific LPC’ market. Nottingham still has only one firm signed up to an exclusive deal in London while Bristol does not even have a base in the capital and now admits its plans are on hold for the time being after losing the bid.

This is significant as rivals believe both law schools’ chances of making a splash in London are rapidly diminishing. As Nigel Savage, College of Law chief executive, says: “The issue for Bristol and Nottingham is that they should have come to London years ago when their brands were at the top of the game and they’re not any more.”

Of course, Bristol and Nottingham refute such claims, with the latter going as far as to assert, not entirely convincingly, that the decision is “not a blow at all”.

Even for BPP, the episode will be surely unsettling. While the provider will be happy to have retained its most important mandate, worth around £4m annually, the fact is the law school has become worryingly tied to a single commercial relationship. And as a consortium deal, there is always the danger that internal rivalries and differing agendas could spilt the grouping.

In this context, the forced optimism of rival providers desperate to enter the increasingly London-centric legal education market has some basis. With the game of musical chairs that has defined legal education since the launch of the original City LPC six years ago still far from over, there is plenty left to play for.

georgina.stanley@legalweek.com