GE Frankona Reinsurance has selected its first formal set of panels for legal services.
The UK non-life subsidiary of Employers Reinsurance Corporation, whose parent company is GE (General Electric), has completed an online bidding process to decide on its panel firms for five areas of work. The use of the internet for the pitching process originates from GE's online procurement initiative. Although GE has employed online purchasing strategies for some time, this is thought to be the first time that it has been extended to legal services. An online statement from GE asserted: "Though we do not always select the lowest bid due to fulfilment and service issues with suppliers, e-auctions allow GE purchasing managers to monitor competitive pricing and reduce total costs." The reinsurance company has historically used a number of firms for legal work and has had a reputation as an organisation that eschews the traditional panel system. Advisers have included both City and national insurance law firms. Barlow Lyde & Gilbert, Beachcroft Wansbroughs, Berrymans Lace Mawer, CMS Cameron McKenna, Davies Arnold Cooper (DAC), DLA, LeBoeuf Lamb Greene & Macrae and Reynolds Porter Chamberlain are all understood to have worked for GE Frankona. It is understood that the driving force behind forming these panels was the need to rationalise the sources of legal services. In an effort to focus on a reduced number of firms, GE Frankona invited specific firms to e-bid for a panel place. Keeping costs down is also thought to be a motivating factor behind the review. It is understood that Berrymans and DAC were among the firms not to participate in the bidding process. A source close to Berrymans said: "While we'd like to have been asked, we don't have much of a historical relationship with them." A spokesperson for LeBoeufs said that although the firm had not participated in the bidding process, "it is a client, it will continue to be a client, and we enjoy an excellent relationship with it". It is understood that among the panel places gained and lost, Barlow Lyde will continue to work for GE Frankona, but Reynolds Porter was not successful in its bid. GE Frankona refused to comment on the composition of the panels or its legal spend.