Clifford Chance has missed out on a spot on Aviva’s new group and UK panel, following a similarly unsuccessful pitch for the insurance giant’s plc roster in April.
The principal advisers on the new Aviva Group and UK panel are Ashurst, DLA Piper, Latham & Watkins and Linklaters for London, continental Europe and Asia, with places awarded to Addleshaw Goddard and Pinsent Masons to advise the insurer’s regional offices in the UK.
The latest appointments finalise the second and final stage of the insurer’s panel process, which began with the plc roster review earlier this year (13 May 2013) and saw Allen & Overy (A&O) win its first mandate for the insurer alongside legacy Aviva panelist Slaughter & May. Both firms have been grandfathered onto the group and UK panel.
Despite an unsuccessful bid for a plc place, Linklaters made it onto the group panel unlike Clifford Chance, which was among the firms that failed to meet Aviva’s stringent criteria. Firms were asked to make pledges including a commitment to cut hourly rates by at least 15 per cent until the end of December 2015.
An additional 13 firms were appointed for specialist work, including several for Aviva’s fund management business Aviva Investors, and for specific regions such as the US and Ireland (see full list below).
Aviva Group’s general counsel Monica Risam led the latest review, inviting 35 existing advisers to tender by demonstrating leadership and positioning in the market, relevant experience with the insurer, an ability to provide appropriate services and lawyers, as well as the required discount, flexible pricing and additional volume discounts.
Risam was appointed general counsel for Aviva Europe in 2011 by Aviva plc general counsel Kirsty Cooper to help bind the global legal function together (5 September 2011). She was later promoted to the role of general counsel for Aviva Group.
She joined as the company restructured and introduced a cost-saving target of £400m across the board. “We didn’t set a target for the legal function because we manage our spend according to need, but last year it was £35m and we expected that spend to come down significantly,” she explained.
One firm beat the 15 per cent discount level by a staggering 25 percentage points, cutting its hourly rate by 40 per cent to win a place on the panel. Risam said the Aviva team working on the panel review, which included one dedicated procurement team member, were pleasantly surprised by the commitment firms demontrated to building long-term relationships with the insurer.
The review was originally scheduled to finish in early July but the insurer extended the deadline, saying that the review was a “significant undertaking” and more time would be needed to ensure the “process [was] thorough and rigorous” (8 July 2013).
The panel review began in May when firms were given three weeks in which to return the tender detailing their previous work with the group and what they could offer.
“We then took those submissions and rated them against the criteria and negotiated fees and value-add for about eight weeks,” said Risam.
She said the process was quite organic because it was the first global review Aviva had done, but it soon became apparent that a tiered approach would work best. This enabled the insurer to cut the panel down and ensure that each firm had enough work to include volume discounts in their pricing. As such, the plc roster is efectively the top tier, followed by the group and UK panels and finally UK regional advisers.
Insurance giant AIG is also poised to announce the results of the latest review of its Emea advisers, having kicked off a revamp of its regional roster earlier this year (14 March 2013). The company is expected to reduce the number of firms appointed as well as change the panel’s structure.
Full list of firms appointed to the group and UK panel were:
A&O, Slaughter and May (grandfathered from plc panel)
Ashurst, DLA Piper, Latham & Watkins, Linklaters (UK, Europe and Asia)
Addleshaw Goddard, Pinsent Masons (UK regional)
Quinn Emanuel Urquhart & Sullivan (dispute resolution)
Mills & Reeve (employment)
Clyde & Co (reinsurance)
Willkie Farr & Gallagher (US work)
Arthur Cox, Matheson (Ireland)
Bonelli Erede Pappalardo (Italy)