While Abbey’s new owners Banco Santander Central Hispano had to shell out £9m on postage and packaging for Abbey’s scheme of arrangement document, the Spanish bank has proved itself a master at screwing down its law firms on fees. Sources close to the deal say Santander’s law firm Clifford Chance picked up just £4m for the deal, although another source said that could eventually rise to £6m. Either way, Abbey’s firm, Slaughter and May, has already put in a bill for a whopping £9m.
Slaughters did the complicated scheme of arrangement, but then Clifford Chance advised Santander on some difficult banking regulatory issues. Slaughters has, of course, long since mastered the art of value, rather than time billing. It prioritised Abbey when other banks came calling for corporate advice, and three years ago it saved Abbey from an unwanted merger approach by Lloyds TSB. Nobody can argue that it hasn’t provided long-term value for money.
Plus, Clifford Chance is at the front of the queue for Santander’s ongoing work. It’s a lot harder to bargain with a head of legal at Santander, who controls the legal budget, than an outgoing financial director at Abbey.
The ups and downs of BCCI
Gordon Pollock QC – otherwise known as the founder member of the ‘£3m-a-year club’ – returned to the BCCI arena last week to withdraw allegations that a senior official of the Bank of England had lied.
Since his exhausting (and record) 79-day opening salvo, Pollock has been less visible in Court 73, leaving much of the daily courtroom battle to his supporting cast. Perhaps not surprising when that’s led by the top female practitioner at the bar today, Matrix Chambers’ Clare Montgomery QC.
His return to the front line on behalf of the bank’s liquidators was met with relish by defending counsel Nicholas Stadlen QC, who described the case as “in the terminal stages of collapse”.
“With every passing twist and turn of this death rattle it becomes more acute, and this is not a game of Snakes and Ladders, it’s not a game of cricket,” Stadlen told the court. “It’s a very serious piece of High Court litigation.”
The case continues. Snakes and Ladders can wait.
On that note…
It’s back. Application Note G to Financial Reporting Standard (FRS) 5, the notorious and much-debated accounting amendment issued by industry regulator the Accounting Standards Board (ASB) a year ago, popped its head up again last week.
Its first appearance raised hell among professional services firms, fearful of the ambiguity the note had created and the hefty one-off tax uplift heading their way because of the tweak. That ambiguity was hardly diminished when PricewaterhouseCoopers and Deloitte & Touche reported figures using two different methods, old-style SSAP 9 and Note G-stylee respectively. The poor law firms might be permitted a little confusion.
And now? Well, the ASB issued a draft guidance on 30 November to provide clarification as to how firms should recognise revenue. Although it’s taken a while, and it’s still only a draft (comments on the proposals by 11 January 2005 please), the end may be in sight. At last.