In April 1995, Guy's and St Thomas' NHS Trust, the largest in the UK, became one of the first to end a tradition of employing legal services on an informal basis.

After a year-long tendering process, two contracts were awarded: one covering medical negligence and employment to Bevan Ashford; the other, for commercial law, property and estates, to Beachcroft Stanleys.The decision to tender for legal services was made in a climate in which NHS hospital trusts are being encouraged to market-test services run in-house and tender for those traditionally provided externally.

Tenders for professional services have focused on management consultancy but legal services remained largely immune.There were two reasons for this immunity: reluctance on the part of trusts to disrupt established relationships with lawyers and on the part of lawyers to take part in a 'beauty parade'; and the need for clients to be clear about which services they require and lawyers about the services they are offering.A pane l led by Tim Ford, deputy chairman of the trust and partner of Park Nelson Thompson Quarrell prepared for the tender by asking four firms to carry out an audit of the trust's legal requirements.

The firms, two of which had already worked for the trust, agreed without charge or promise of preferment to provide a range of advice about the services the trust should be asking for.The trust also sought guidance on three more general issues: the stance to take on the transfer of work to a different law firm; fee structures; and whether it should offer one contract, or more than one.The latter question was the major point of difference in the recommendations made by the firms.

For the five main areas identified by the trust (clinical negligence caseload, employment law, commercial law, estates and property and corporate governance), two firms recommended a single contract and two suggested a division of the contract.The trust's decision to divide the contract into two can be explained in a number of ways: as litigation and non litigation; NHS focused and non NHS; or operational and strategic.

It was also felt that the division would provide an appropriate focus and enable the trust to look for particular strengths in the firms competing for each contract.In order to ensure full competition, the trust advertised its invitation to tender in the EC Journal and the Gazette.

The response was enormous and led to an additional shortlisting exercise, based on minimum acceptable standards.The panel was clear that it wanted only to consider firms with the range and depth of experience that the largest trust in the UK would need.

To this end four criteria were set:-- Capacity - the number and seniority of staff identified to provide the service, the size of the firm, and the resources at its disposal.

The trust asked for a liaison partner to manage the contract, with a partner to lead on each of the areas to be covered, each supported by another partner and fee-earner.

Other information required included details on the last two financial years, capacity for research, compatibility of systems and library facilities.-- Ability - assessed on the basis of references regarding performance and working relationships taken from clients whose business was of similar size and purpose to the trust.

The trust asked for the names of three referees.-- Experience - work undertaken in the field of health care work, within the last two financial years.

The trust asked for details of work carried out in all the main areas of the contracts, a summary of training courses, seminars and conferences organised by the firm.The trust also asked that the liaison partner have five years' continuous personal involvement in health care work and the partner in each area to have two years' continuous involvement.-- Knowledge - an understanding of the NHS, its ethics and objectives, and knowledge of the legislation, statutes and directives relevant to the contract.The criteria were criticised as being unreasonably severe - but they had the desired effect.

Of the 80 firms responding to the advertisement, 30 responded to the questionnaire.

From their responses, seven were shortlisted for the medico-legal contract and six for the commercial contact.A detailed specification, drawing on the conclusions of the audit reports, the assessment of requirements and those of the tendering procedure, was issued to these firms and two days of presentations were arranged.Apart from the panel, representatives from each of the main areas within the trust were invited.

On the b asis of these presentations, the trust's extended panel shortlisted down to two firms for each contract.These presentations took place in October and November 1994: Bevan Ashford and Beachcroft Stanleys were awarded the contracts in March 1995.

The delay was due entirely to an internal need to ensure that all staff in the key areas had an opportunity to review the shortlisted firms, air any concerns they had, and secure confidence that the service they would receive would meet their purposes.The process offers a number of lessons, both for the trust and for the profession.

Tendering forced the trust to be very clear about what it wanted from its lawyers.

However, the exercise took too long and involved a disproportionate amount of senior officers' time.In future, the trust can and will conduct a more streamlined process easier on all concerned.For the profession, it is important to note that although tendering will prove a threat to some, it will provide an opportunity for others to win new business through a process which allows them to come to terms quickly with their clients' needs.

But, however good a firm is, that excellence has to be communicated effectively.The disciplines of the tendering process provide a chance for a firm to confirm for itself and others what it believes the distinguishing characteristics of its service to be.GUY'S & ST THOMAS' NHS TRUST-- Formed in April 1993, Guy's and St Thomas' Hospital Trust is the largest NHS Trust in the UK.Guy's and St Thomas' Hospital Trust treats 160,000 patients a year.The trust has an annual budget of more than £250m and earns over £8m from commercial activitiesGuy's and St Thomas' Hospital Trust runs two sites which occupy 35 acres in total.-- The trust employs 6800 staff.