PPF: How we hunt for value on legal advice

The way we work is constantly evolving across all areas of our business, be that managing our investments, seeing schemes through the PPF assessment period or providing compensation to our members.

Cutting across all these areas is the advice and support that is provided by the PPF’s legal team and its external advisers. Having had a panel of law firms since 2007, we knew it would need to evolve with the PPF to suit our developing needs.

Our asset portfolio has now grown to more than £15bn, we have almost 200,000 members and we are increasingly involved in complex restructuring deals – such as the recent agreement struck with UK Coal – and litigation.

Therefore we decided to overhaul our panel to help us meet our legal needs for the next three years and, possibly, beyond. We wanted to build very close relationships with – and drive especially good value from – a small core group of firms.

But we knew we would also need to be able to draw on a considerably wider group of firms, whether for particularly specialist skills – to cover conflicts – or simply because a particular transaction could best be serviced by a particular size of firm.

Our new core panel comprises three firms. For insolvency and corporate work – including consensual restructuring in accordance with our published principles – we have appointed 10 firms. 18 are on our specialist and reserve panel, covering areas ranging from investments and litigation to tax. Overall, 23 firms feature on one or more of the panels – a modest reduction on the previous 27, but a much more structured approach.

Legal issues pervade everything we do, and we believe these are the right firms to provide expertise where it is needed, while representing excellent value for money to the PPF and hence to the levy payer. Most importantly we’ve chosen people who understand how we work, what we want and what we don’t.

To increase this knowledge the firms will be expected to provide secondees to the PPF, as well as additional benefits such as training and helplines. We have an excellent track record of secondments both to the PPF and out to external firms.

This broadens the knowledge and expertise of those involved and strengthens relationships between the in-house team and external advisers.

All in all, we believe this new panel will give the PPF – and the people and organisations we deal with – the confidence that we are acting on the right advice to make the right decisions in important areas which can often affect thousands of people’s lives.

David Taylor is director of strategy and legal affairs at the Pension Protection Fund