The move follows a comprehensive review, spearheaded by Merrill Lynch general counsel Rosemary Berkery, into how the bank uses legal services internally and into the division of its global markets and investment banking businesses in the summer.
Merrill Lynch, which has historically used over 800 firms worldwide, is rolling out a sophisticated computer-based system to track which firms are being appointed. Once in place, staff will only be able to instruct firms from preferred lists, dependant on the type and value of any given transaction.
"We're one of the first firms on Wall Street to apply this sort of rigour to the provision of legal services," said a Merrill Lynch spokesman.
Firms were added to the list only if they satisfied certain criteria, such as expertise, cost and culture.
One Merrill Lynch source told The Lawyer: "The basic idea is to cement relationships and to leverage off that."
As part of the internal reorganisation, Merrill Lynch head of research counsel Rob Everett has been appointed as head of origination counsel for Europe, Africa and the Middle East. In his new role, Everett will be responsible for the in-house lawyers who work on the corporate finance and advisory sides of the business.
Merrill Lynch has yet to appoint a lawyer to head up the team advising the banks' derivatives and structured products business.
"This was a comprehensive review with a carefully-thought-out response on our ability to provide top-notch legal advice internally," said the Merrill Lynch spokesman.