Abbey instigates wholesale reshuffle of advisers

Abbey National is pursuing a radical overhaul of its legal function despite the fact that the bank is the subject of an £8.75bn takeover by Banco Santander and is facing rival bids from other UK banks.

The bank is tackling both its external advisers and its in-house legal function.

Abbey has asked all its firms to supply details of the work they have done and how much they billed.

Sources within Abbey described the review as an internal verification process and denied that it was related to Banco Santander’s £8.75bn offer to take over the bank.

“This has nothing to do with the bid and is simply part of the legal department’s day-to-day business,” said one source.

The sources argued that the review came after Karen Fortunato was promoted to replace former company secretary and head of legal Gwyn Malkin last autumn. At the start of the year, Fortunato restructured the legal function, which resulted in a staff reduction from around 90 to 50. The restructure was to create a legal department with more senior lawyers and to align it more with Abbey’s business model.

Slaughter and May is Abbey’s principal adviser. It is understood that the bank also has relationships with Addleshaw Goddard, Allen & Overy, Berwin Leighton Paisner, DLA, Hammonds, Lovells and Wragge & Co.