Aviva completes extensive panel rejig, assigning work by jurisdiction
Insurance giant Aviva is the latest big company to trim its number of legal providers. On its UK and group panel it is taking a hardline approach, cutting fees and arranging the panel by jurisdiction.
Aviva appointed just eight principal providers; Allen & Overy (A&O) and Slaughter and May were grandfathered in from the plc panel; Ashurst, DLA Piper, Latham & Watkins and Linklaters won spots covering the UK, Europe and Asia; and, to ensure UK offices benefitted too, Addleshaw Goddard and Pinsent Masons were appointed for UK regional work.
An additional 13 firms were appointed for specialist work, including several for Aviva’s fund management business Aviva Investors, and for regions such as the US and Ireland.
It has taken a little more than two years to get to this point, with Aviva Group general counsel Monica Risam installed as general counsel for Aviva Europe in 2011 to help bind the global legal function together and extract value from panel firms. This latest rejig is the final stage in that arduous process. Cutting firms to those with the right cross-jurisdictional expertise means Aviva has adequate coverage without spreading work too thinly while being able to secure volume discounts.
The insurer demanded at least 15 per cent discount on standard rates as well as wanting additional discounts in return for a guaranteed slice of spend.
One firm is understood to have cut its fees by as much as 40 per cent, showing how sought-after panel spots are.
Although insurance is an area where fee pressure is prevalent, other sectors have adopted similar tactics. A particular favourite for in-house counsel is rearranging panels along jurisdictional lines. When Shell formalised its new panel in May, then legal director Peter Rees QC decided to scrap the global panel in favour of a number of firms with capabilities across the jurisdictions it operates in.
Another insurance player, AIG, is about to announce the results of its latest review, with plans to cut the number of firms and make appointments that reflect the more Europe-wide focus of the business.