Credit Suisse, one of the top three Swiss banks, has appointed seven leading firms to a new legal panel in a move which aims to control cost and quality of services provided.
The firms – Allen & Overy, Denton Hall, Herbert Smith, Stephenson Harwood, Watson Farley & Williams, Lawrence Graham and Rayner De Wolfe – are all expected to benefit by having Credit Suisse as a major client.
The new panel replaces a loose system whereby more than 20 City firms received ad hoc instructions from various dealmakers and managers throughout the bank.
Direct contact between the in-house bankers and their lawyer counterparts will continue, but communication will be focused through the legal liaison officer, a new management position in Credit Suisse.
Geoff Ireland, internally appointed to the liaison job, has overseen the panel's creation.
“The banking market is going through such a period of change that we now have to see whether our needs are met by our lawyers,” says Ireland.
“For us, the whole thing is becoming more structured and more organised. I know other banks are looking at their structures and whether they should go out to external legal advisers. Some other banks operate in a similar way to that in which Credit Suisse used to operate.”
Credit Suisse in London decided several years ago not to have an in-house legal team in the city, although such departments exist in Zurich and in some US offices. This means that head office-type work is included in the panel work.
This will include corporate, wholesale and private banking, treasury product-related matters, as well as property and lease negotiation, regulatory issues and employment matters.
“The intention is the firms will see more business from us. We are looking at controlling legal costs,” says Ireland.
There are winners and losers in the light of the new panel. For the winners, firms which have had only occasional dealings in the past will find themselves with a major new client, says one lawyer.
Equally there may be those on the panel who find they have to compete more closely for business. It is understood that some big legal names are among those firms not awarded a place on the panel.
Geoffrey Wynne, head of banking at Watson Farley & Williams, says: “We are very flattered to be in a panel for a bank as prestigious as this.”
Wynne, a former head of legal at the Royal Bank of Canada, says: “Getting to know the bank better is bound to increase efficiency. As a former in-house lawyer, I have to support that as an idea.”
All the firms in the panel were invited to a 'beauty parade'. Most had been on the previous list of firms used.
Ireland says that before, firms were used on the basis of their various contacts within the bank, without any formal business agreement. This was very inefficient and quite expensive, he says.
“It's a case of stopping the merry-go-round and deciding what we needed and what firms could offer,” he says.
Criteria for panel membership include flexibility, commercial outlook, and trans- parency of costs.