The Legal 500

Outsourcing is not an easy field for law firms to break into - the outsourcing consulting firms that sprung up in the 1990s are keen to minimize law firms’ involvement, and on the outsourcing service supplier side of the business most of the legal work can be done in-house. The most sought-after engagements are those on the customer side, where law firms can be involved from the initial discussions on whether or not to outsource, right through the process to implementing an outsourcing strategy. Few have been able to operate a dedicated provider-side practice and the transition from this area to the more lucrative customer-side work has been the undoing of several groups in this field.

The suffering US economy means that outsourcing deals continue to pick up pace as companies try to minimize expense, and law firms will be clamoring for the work. Although the market was unstable in 2008, the number of deals the top firms are picking up, including re-negotiations, has followed a trend of growth into 2009.

Consequently, there are plenty of firms seeking to translate a strong record of acting on international transactions into a serious outsourcing practice. However, whilst there is little doubt that many firms are able to put together an outsourcing deal, this section recognizes those with a specialism in handling the most complex and wide ranging outsourcing deals. It is, then, telling that as outsourcing comes to the fore for companies seeking to reduce costs, the elite firms maintain their stranglehold on the top end of the market. The indication is that prize mandates still tend to go to the top few firms, all of whom have dedicated individuals with recognized experience in this area and the reach to co-ordinate deals in several overseas jurisdictions.

Mayer Brown

PRACTICE: A team is more than its members, but a group with such reserves of prodigious talent as Mayer Brown’s outsourcing practice certainly has a head start over the competition. ‘Unquestionably of the highest quality’ and ‘simply working on another level to everyone else’, according to clients, the firm has built a group that continues to be at the forefront of the most dynamic areas in outsourcing.

One such area is offshore outsourcing. Whilst the practice is well-known for its domestic work, the international scope of the group and the familiarity of its attorneys with increasing role in handling big deals in the most active jurisdictions makes it and them ‘definite first-choice’ for many clients.

Indeed, none are better equipped to facilitate the multi-source outsourcings that have emerged in recent years. The team’s degree of engagement with the top-end of the market underscores its ability to act quickly and effectively, even in periods where smaller deals are prevalent.

A glance at the recent accomplishments reveals work with the latest in a string of roles advising Cargill including acting on one of the largest enterprise resource planning implementations ever attempted, alongside a mandate negotiating a framework agreement with a supplier on behalf of McCain Foods.

This diversity of work, both in terms of the industry and in terms of the specification of the appointment, underlines the group’s breadth of service on the customer side. Clients note that ‘the team acts like part of a small firm in several ways but they can do what’s asked of them and provide comprehensive sourcing strategy to facilitate just about anything’.

Further to the capacity of its reputation for winning mandates as companies look to outsourcing arrangements in the midst of the downturn, so existing clients frequently call on the team in recontracting their current arrangements, recently acting for Wachovia Bank in the renegotiation of an existing agreement with Hewitt for employment services.

Whilst a close relationship with TPI consultancy, a leading outsourcing consulancy firm, has undoubtedly been a useful source of work, clients are also quick to highlight the group’s ‘tremendous drive and commercial awareness’ as key factors in its continued dominance of the market.

CLIENTS: Clients of the practice include TXU, Procter & Gamble, United Airlines, Dow Chemical, Allianz and Fireman’s Fund, Whirlpool, Rio Tinto, and ITT.

INDIVIDUALS: Although the practice has exceptional bench strength, four partners have earned praise in particular for their performance in recent years.

‘Inspiring negotiator’ Brad Peterson is based in the firm’s Chicago offices. One enthusiastic client says that, ‘considering what you get with him in terms of brains and dedication, you know that whatever the price, he’s the guy you have to have on your team’.

Out of the same office, Paul Roy has developed a reputation for being ‘a great asset, time and again’. ‘He’s seen a lot of it before, but even if we’re looking at a more innovative structure, he’s the first to say how we can make it work and whether it’s the right thing to do’, say clients.

In Washington DC, Dan Masur offers clients an ‘inexhaustive supply of advice and knowledge’ and ‘precise judgement’. One goes further to describe him as ‘pretty much the top name in the field right now’.

David Hudanish’s New York practice comes in for praise also and clients are particularly keen to point out that he is ‘straight up with you and not afraid to do what it takes to get the best out of a deal’.

Latham & Watkins LLP

PRACTICE: The criticism occasionally levelled at the Latham & Watkins LLP outsourcing group, that it sacrifices global reach for depth of expertise in the more esoteric areas of the industry, is becoming more and more difficult to sustain.

A domestic team of 12 partners continues to live up to expectations and provide ‘great competency and care’ to clients on a wide selection of transactions, among which areas, that might be considered to be more specialist, tend to feature highly.

With a reputation among its clients for ‘a commendable and progressive attitude to structuring outsourcing deals’, the solid progress the group is making in attracting market share has as much to do with the development of the team as it does the international platform the firm provides.

As such, the Silicon Valley practice has been one of the important hubs of activity for the group. Attorneys in these offices have recently advised Beckman Coulter in a series of HR-related BPO transactions, as well as working on several ITO deals for technology companies. Having tapped into the firm’s prowess in technology matters, the integration of work in areas such as asset and fund management outsourcing and HRO is of particular benefit to the group’s profile.

Washington DC is another key office and as the group continues to break ground with the financial, pharmaceutical, and communications clients, it has been this arm of the practice that has been at the fore.

Recent work with Nike in the outsourcing of its global IT infrastructure and desktop and help desk sections is a particular highlight, underlining the scale of the work this ‘exceptionally practical and thorough’ practice undertakes.

Taking this further, the close ties the firm has to technology, pharmaceuticals, communications and health industries, in particular, combined with the width of resources available in the team have put them in prime position to act on several leading deals. A prominent role on Hawaiian Telecom’s termination of its BPO deal and engagement with Accenture as a replacement vendor stands out, partly for the co-ordinated service provided out of both West and East Coast offices.

Partner Daniel Mummery left the group in early 2009 to join Gibson, Dunn & Crutcher LLP. This is undoubtedly a blow to the group and there will be work to do in maintaining the same level of presence on the West Coast in the wake of his departure.

CLIENTS: Clients of the team include Old Mutual, Mutual and Federal Insurance Company, Blue Shield, Continental Airlines, Bally Total Fitness, Clorox, Gateway and Charles Schwab.

INDIVIDUALS: Chicago partner and global practice chair Marcelo Halpern ‘sets a fantastic example - his work-rate is second-to-none’, say clients.

Allen Klein is the leading figure for the group out of this office and, having been involved of many of the team’s most high-profile mandates, is thought of as ‘one of the best outsourcing advisors in the country’.

Milbank, Tweed, Hadley & McCloy LLP

PRACTICE: The departure of practice icon John Halvey to become general counsel at NYSE Euronext has undoubtedly had an impact on the perception of Milbank, Tweed, Hadley & McCloy LLP’s outsourcing practice in the market. Though it has done well in holding on to key clients over the last year, the profile of the team has suffered. However, clients recognize the presence of ‘truly award-winning service’ and a team that ‘has been really reliable over the years and hit the target consistently’; a reputation that continues to ensure the group retains a high profile.

The focusing of the majority of its resources in New York hasn’t translated to a narrowing of the practice’s client base, which remains diverse and reflective of its wide range of capabilities. As such, say clients, the group remains ‘committed and responsive’ in its approach, with an emphasis on ‘keeping the attention on the commercial value of the transaction and not losing sight of the client’s best interests’.

Recently, the team worked with Entergy in connection with an HR outsourcing agreement with Ceridian and an IT outsourcing agreement with Accenture. Placing this work alongside representation of the Creditors Committee of Lehman Brothers in handling various service agreements and licensing issues in the Lehman bankruptcy highlights the practice’s engagement with high-profile mandates across the gamut of industries.

The importance of the international element of an outsourcing practice, frequently underlined by the prominence of firms with global platforms, has again been something that the ‘really superb’ Milbank, Tweed, Hadley & McCloy LLP has had in place for well over a decade. The presence of a strong London component and a coordinated effort across its offices has been the foundation for much of the success of the US group, as it has been able to continue to challenge larger practices for multinational mandates. The team recently advised Avon Products on a range of deals, including a shared services center transaction in Eastern Europe with Cognizant, a global HRO with IBM, and an internal accounting outsourcing transaction with Ernst & Young. These transactions display the team’s ability ‘to get the job done, in the right timeframe and at the right cost’; an approach which has kept them at the top of the list for many clients.

CLIENTS: Clients of the practice include Cincinnati Bell, CIT Group, CVS/Pharmacy, Dow Jones, Fidelity, Genpact, Paxys, PepsiCo, Unilever, WestPoint Home, Direct Energy, Home Depot, Johnson & Johnson, LexisNexis, Viacom/MTV Networks and Prudential Insurance.

INDIVIDUALS: Partner Stephen Nordahl is ‘very highly thought of’ and ‘among a select few lawyers who can get a global scale project done on time and with a minimum of fuss’, say clients. Nordahl’s managing of billion dollar transactions for clients such as Johnson & Johnson are a particular highlight for the team.

Robert Finkel is another prominent name with a reputation for handling large-scale outsourcing agreements ‘with a practical outlook’ and ‘first class judgement’, according to clients.

The pair is based out of the firm’s New York offices.

Morgan Lewis

PRACTICE: A concerted effort in recent years to acquire the right talent and add depth to an impressive roster of clients has put this ‘outstanding’ Morgan Lewis outsourcing practice in the driving seat as it looks to press the top of the market.

The spread of well-recognized, market-leading attorneys across East and West coast offices, in particular the Philadelphia and New York offices, has made the team a force to be reckoned with. This deployment has also benefited the group’s diversified approach to the wider market, building on what clients term as ‘an excellent understanding of the issues affecting life sciences industry’ to gain a major stake in the financial services, manufacturing and retail markets. Taking what clients call a ‘holistic approach and a keen eye for what makes sense commercially’ and applying that to a practice with a global outlook has been critical to the success here.

The team represented Britol-Myers Squibb in a series of outsourcing transactions recently, including a $350m global transformational outsourcing of HR operations to IBM and $775m global IT outsourcing with EDS.

With 29 lawyers across ten offices globally, it’s fair to say that the firm has placed an onus on making this a prominent international practice. Recent work, such as the representation of KVH, a Tokyo-based IT/communications services provider in a strategic agreement with Infosys, underlines the progress here.

The capacity to take on transactions of this scale with some regularity, and the reputation the group has acquired for handling global multi-tower outsourcing agreements puts the practice among the very best in the market. Clients attribute the success of this approach to ‘great resource management, availability and co-ordination of expertise’.

CLIENTS: Clients of the team include Bank Leumi, Cadbury, Del Monte, Eli Lilly, Lazard Asset Management, NiSource, Universal Music, Wyeth, The New York Times, CIGNA and Estée Lauder.

INDIVIDUALS: Philadelphia partner Barbara Melby receives strong approval from clients, one of which describes her as ‘great counsel, great value for money’. She is further praised for having ‘deep experience’, being ‘very thoughtful’ and, more generally, ‘one of the pre-eminent outsourcing counsel today’. Melby works closely with her local office counterpart Michael Pillion. Clients say he is a partner who is ‘never out-thought or out-manoeuvred’, and one tops the rave reviews to say they ‘would only hesitate to recommend him in order to keep him all to ourselves’.

‘There’s no-one better at leading the transaction process and getting the most out of it for their client’, say clients of New York partner Akiba Stern. ‘A really impressive strategist’, Stern has a leading record in handling multi-tower sourcing deals and has built a valuable international element to his practice.

Having arrived in 2008 from Jones Day, Dallas partner John Funk has integrated his high-end outsourcing practice into the team’s composition and continues to provide his clients with ‘excellent results’. ‘Smart, proactive and responsive’, according to clients, Funk has maintained a reputation as ‘a really good outsourcing lawyer’.

Pillsbury Winthrop Shaw Pittman LLP

PRACTICE: Although the firm’s pedigree in this area is unquestionable, post-merger departures have caused a lingering degree of inertia in a group that was once the leader of the pack. The team has recently acted on several complex transactions, and certainly it isn’t short on resources with twelve partners lending their services to outsourcing.

The group brings ‘a distinguished quality of service’ to transactions that include and stretch beyond the firm’s core strengths in energy and financial services, to encompass life sciences and manufacturing. Recently, the team acted for Exelon with regard to its deal with CSC, which took over from AT&T and IBM as providers, for a spectrum of infrastructure services.

This flexibility, born of the multi-disciplinary approach that distinguishes the group from several rivals, gives the team the capacity to call on practical advice from a range of sources to meet the specific needs of clients. That said, the deal flow of the group doesn’t compare with the top-tier and much of the recent highlight work has come from longstanding clients.

Clients note that the attorneys ‘are dedicated, on-the-ball, and very well-versed in the processes that make up a major transaction’. One client offers the view that the team is ‘above all very good at what they do, all the contacts there having been doing it for years and years and they know exactly what they have to do to keep us happy’.

CLIENTS: Clients of the group include American Express, Xerox, General Electric, Equifax, Discover Financial, Hertz and the Nielsen Company.

INDIVIDUALS: ‘Efficient and thorough’ Robert Zahler is a partner with a ‘creative mind’ and garners particular praise for his ‘attention to detail’, one client describing him as a ‘giant in negotiations’.

Practice-head James Alberg has ‘an astute outlook on outsourcing that sets him apart from his peers’. Clients say he has ‘great leadership on deals and a vast toolset of legal skills’.

Partner Aaron Oser also wins mention for his work for key clients American Express, among others, and his reputation with clients as ‘a trusted advisor and a stalwart counsel’. All recommended partners are based in the firm’s Washington DC offices.

Baker & McKenzie

PRACTICE: Although the distinct approach the Baker & McKenzie practice has taken toward the outsourcing arena has undoubtedly had its advantages within the market, it’s difficult to point to any particular mark of recent progress, and the group still lacks a significant East Coast presence.

Clients claim the team ‘still provides the high level of service we’ve come to expect and has been much more consistent than other firms we’ve used’. This reputation originally comes from service-provider work, but the current practice continues to balance this element with a roster of prominent customer-side clients.

Few practices take on this dual-focus, which in itself makes the team a different prospect. But further, the closeness with which its attorneys intermingle the expertise between the outsourcing practice and other constituents of the technology group, such as data protection and privacy, marks it out from competitors. As such, the attorneys have a name for handling the high-end, complex deals and ‘they’ve always been responsive to our needs, professional under pressure, and focussed on delivering a high value service’, say clients.

Along these lines, the team recently advised a large client on a multi-jurisdictional outsourcing of IT infrastructure services to EDS, a project that sat amid a series of roles featuring servicing arrangements from global providers and structuring sourcing contracts from a data security and privacy perspective.

CLIENTS: Clients of the team include Cardinal Health, Hewlett-Packard, Accenture, Bank of America, Hyatt, Kimberly Clark and Micron Technologies.

INDIVIDUALS: Chicago partner Michael Mensik ‘puts our needs first’, say clients and ‘takes on every challenge with an attitude and a well-honed set of skills that work exceptionally well’.

San Francisco partner and IT-expert George Kimball is praised by clients, in particular for his ‘impressive technical ability’.

Group head Lothar Determann also practices out of this West Coast base and ‘gives his clients access to a really vast knowledge of the law and the industry’. ‘Very active, communicative and sharp’, Determann’s deep entrenchment in the technology field has given him scope to specialize on areas such as software licensing and IP relating to technology transactions.

Gibson, Dunn & Crutcher LLP

PRACTICE: The arrival of William Peters at Gibson, Dunn & Crutcher LLP in 2007, while in itself a tremendous boon given his outsourcing background, has allowed the firm to build a ‘dedicated and knowledgeable’ practice that has staked a share of a very competitive outsourcing market. Daniel Mummery also joined the practice in early 2009, a significant hire given the reputation he built at Latham & Watkins LLP and one which looks set to have a big impact on the presence of the practice in the coming years.

‘Adept at making complex projects manageable’, say clients, the team has thrived on a growing dealflow from a broad range of industries, while also benefitting from the firm’s deep relationships in areas such as communications and entertainment.

Still, it’s been the scope of the deals that this group has endeavoured to undertake that has caught the eye. Recent work with Apria Healthcare in connection with several transactions including the structuring and negotiation of complex technology agreements with Accenture and Capgemini for the implementation and hosting of a SAP-based ERP system shows the group’s depth of capabilities on the customer side.

Recognized by clients as a ‘top-rated crop of individuals from junior level right up to Peters’, the team makes up for its relatively small faction of senior lawyers with a proven ability to handle cases of any complexity. Recent work with Warner Brothers on multiple outsourcing transactions involving business functions and IT, finance, accounting and HR, demonstrates this amply.

CLIENTS: Clients of the team include Allianz, American Express, Boeing, Chevron, Fireman’s Fund Insurance Company, Ingram Micro, Marriott, Marsh & McLennan, Nissan, Southern California Edison, Toyota Financial Services, UnitedHealth Group and Western Digital Corporation.

INDIVIDUALS: William Peters’ work out of the Los Angeles offices has been the pillar over which practice has arched. Having garnered a reputation among clients as ‘a true professional and a great ally’, and, ‘incredibly switched on and available’, Peters is one of the most high profile outsourcing lawyers in the market, and as such has led on virtually all of the firm’s most prominent activity in this area. Recent arrival Daniel Mummery is known as an ‘unreserved expert’.

Morrison & Foerster LLP

PRACTICE: A firm ‘right at the heart of the technology world’, Morrison & Foerster LLP continue to offer a strong outsourcing service as part of a larger group that covers virtually every facet of the industry. The upshot of this approach is beneficial from the point of view of the variety of spin-off work the team gains and, conversely, the breadth of expertise it is able to provide to an outsourcing client.

However, the perception is still that this group lacks the profile of some of its competitors, despite having 19 partners capable of acting on these matters. The recent arrival of senior counsel Julian Millstein, one of the founders of Brown Raysman Millstein Felder & Steiner and a highly regarded name in the technology law field, has put the firm in a position to address this going forward.

Still, the firm core competencies, such as media and entertainment, have a strong bearing on the output of this ‘vigorous and effective’ team. As such, clients such as Warner Brothers Music, for whom the group advised on the outsourcing of applications development and maintenance operations and global initiatives, are able to call on the firm for a range of services under the technology umbrella, such as data protection and privacy.

Meanwhile, the financial services sector remains an area of strength and one particular recent highlight has been working with Lehman Brothers on an ITO and a BPO deal, in the wake of the company’s collapse.

CLIENTS: Clients of the team include Credit Suisse, DWA/Technicolor, Novartis, Broadridge Financial Solutions and AIG.

INDIVIDUALS: Co-chair of the technology transactions group, John Delaney’s practice out of the New York offices has earned him a reputation as ‘a very fine individual’. One client enthused that they were ‘delighted to have had the chance to work with such a talent’.

Partner Vivian Hanson also comes in for praise, with clients describing her as having ‘superb judgment and quick to tackle any problem that is going to come in the way of a deal being done’. Hanson’s practice, which is also based in New York, has been instrumental in handling outsourcing for major clients in Asian jurisdictions, with notable specialization in Japan.

Senior Counsel and recent arrival to the New York offices Julian Millstein is also recognized for his extensive experience in the industry.

Alston & Bird LLP

PRACTICE: Although still a young practice by comparison to the more prominent of its competitors, Alston & Bird LLP has two experienced partners at its center and has been able to build outwards around the relationships and workflow they have maintained over recent years.

Now numbering around a dozen partners, the practice has held on to the approach of focussing on global outsourcing projects, and hardly dents the market for more commoditized domestic deals.

Providers of ‘advice full of commercial sense and real world experience’, according to clients, the group’s forte in performing strategy assessments and handling large-scale IT infrastructure outsourcing has won them work with several leading international clients. For example, the team recently advised the Commonwealth Bank of Australia in its revamped $310m service-based contract with EDS to deliver desktop and other end-user computing service for the next five years.

Elsewhere, the group has advised a major bank on the selling off of major products and resourcing of infrastructure elements. Having established a solid record of advising financial institutions on sourcing strategies as they grow, the team’s recent roles on these renegotiations has kept them among the mandates at the forefront of the global market.

CLIENTS: Clients include Amtrak, Nokia, ING, MeadWestvaco, HP and UPS.

INDIVIDUALS: Chair of the firm’s sourcing practice Trevor Nagel is ‘one of the original core of outsourcing experts’, having honed his skills with Shaw Pittman in the 1990s, and developed and built relationships with a batch of major overseas clients.

Both he and his colleague, partner Lee Van Blerkom, a ‘really good counsel’ according to clients, operate out of the firm’s Washington DC offices, and are described as ‘terrific at generating precise solutions’.