FSA to create elite external adviser list as credit crunch bites

City watchdog the Financial Services Authority (FSA) is compiling its first-ever list of go-to external lawyers as turmoil in the sector it regulates continues apace.

Until now the FSA has rarely turned to external firms, handling the vast majority ;of ;work ;in- house while retaining the counsel of a trio of silks.

General counsel Andrew Whittaker said: “We mainly do all the work in-house because it would be very odd if anyone knew more about financial services regulation than we do.”

That said, he has used Ashurst on a number of occasions, generally when preparing to defend litigation, and has established relationships with litigation partner Ed Sparrow and insolvency partner Nick Angel.

Whittaker said he will invite a “good number” of major firms to pitch in the coming weeks, adding: “We need people with the ability to take over and handle a big case if Ashurst wasn’t able to handle it for us.

“We’d be looking for individuals within firms who could bring exactly what our three counsel and Ashurst bring – a good combination of public law and commercial law experience.”

Whittaker ;allocates £500,000 of his £7m annual budget to cover the cost of external advice, with the bulk of that going to Michael Brindle QC of Fountain Court, Charles Flint QC of Blackstone Chambers and Ian Glick QC of One Essex Court.

The FSA has come in for criticism recently over its handling of the Northern Rock situation. An internal review resulted in Clive Briault, who led the team responsible for supervising the bank in a non-legal role, parting company with the organisation.