The future of Carillion’s 'managed legal services' offering, which was in the process of applying for an alternative business structure licence, remains unclear following today's news that the construction company has declared insolvency.
Carillion Advice Services (CAS) was set up in 2011 to support Carillion's in-house legal team from Newcastle. CAS has provided over 30,000 hours of support to the Carillion in-house team, saving the business around 15% in external legal spend in 2016. CAS's team of 60 paralegals in Newcastle and 10 in Birmingham handle high-volume work of low-to-medium complexity, such as confidentiality agreements and legal research. CAS also provides contract management, document review and litigation support, corporate due diligence, unbundling and project support services.
CAS stresses that it is not a law firm or in-house department on its website. However, the centre has been seeking alternative business structure status.
CAS has been approached for comment.
Carillion plc has 450 contracts - including several with the Ministry of Justice. In an announcement today, the Cabinet Office said the government will continue to deliver all public sector services following Carillion Plc's insolvency. The announcement said Carillion decided to initiate insolvency proceedings after meeting with its bankers and lenders. The official receiver has been appointed by the court as liquidator; PwC partners have been appointed special managers.
Carillion plc's in-house legal team has around 25 solicitors.
Former justice secretary David Lidington, now Cabinet Office minister, said: 'We understand that some members of the public will be concerned by recent news reports. For clarity - all employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do.'
In January 2015 Carillion announced that it had signed government contracts worth around £200m to provide facilities management services for public sector prisons. One contract provides services in prisons in London and the East of England; the second covers prisons in the south-west, south-central, Kent and Sussex. The contracts cover roughly 50 prisons, initially for five years, with the potential for two subsequent one-year extensions 'subject to satisfactory performance'.
Manchester Magistrates' Court is among a list of public-private partnership case studies published on Carillion's website. Carillion was part of a consortium appointed to provide new court facilities, comprising 18 courts, a coroners' court, support facilities for 180 staff and retail space. The case study states that Carillion sold its equity interest in Manchester Magistrates Court to Secondary Market Infrastructure Fund (SMIF) in September 2006.