Securing a spot on an international bank’s panel is a big win for any firm. Last week 11 firms were celebrating their places on one of the most significant following Barclays’ conclusion of its six-month review (www.thelawyer.com, 6 July).
With the bank carrying out a review only every two years, it is easy to understand why these firms take the tender process of panel selection very seriously.
Although the purpose of a review does not change from year to year, the detail and structure is very much an evolving process that needs to adapt to the changing business.
Barclays chief operating officer for legal compliance Richard Daniel tells The Lawyer: “You have to develop the panel review and the structure of the panel along with the business. Barclays isn’t the same as it was two years ago when we last did a review. The markets have changed and our global presence has changed. These things need to be considered.”
Barclays has now combined the fiduciary and trust and establishment panels and has created a new commercial panel to address adequately the legal commercial demands on the business.
Adapting the panel to suit the modern business and selecting the right firms for the next two years is a mammoth task. In-house legal teams take months to complete a process that has such a wide-reaching impact on the whole business.
When banks decided to use procurement specialists to assist on panel reviews, some law firms criticised the new trend for being overly bureaucratic (the Royal Bank of Scotland review nearly sparked a riot). But things have since moved on, explains HSBC head of group general counsel Richard Bennett.
“Times have changed and firms have got used to banks using procurement specialists, while the procurement process has improved and both parties have gained experience in how to execute a successful panel review,” Bennett says.
He adds that making sure procurement is very much a collaborative effort between the procurement and in-house legal teams has allowed that element of the panel review to become more accepted.
Each bank operates a different procurement process and will ask different things in the request for proposal. With the ever-increasing importance of diversity in all types of businesses, proving the firm has a successful diversity policy is becoming a more important feature.
Daniel says: “We asked the firms to provide details of their diversity policies and how this is put in place in the firm. Barclays takes this very seriously and we want to know that the firms on our panel share the same values.”
With Barclays and other businesses emphasising the importance of diversity across the board, other banks are taking steps to include these details in their next reviews.
Bennett says: “We did our last review three years ago. We didn’t require this kind of information at the time. However, it’s likely that we’ll include this in our next review. This has become something that’s more and more important and we also want to know firms are responsible.”
The traditional cost pressure from the wider business will always feature highly in the panel review, along with relationship management and how firms demonstrate their value to the bank.
Schroders head of legal Nick Evans says: “There are always pressures to keep costs to a minimum, but you have to balance that with finding firms that can give the international focus that you need. For example, can this firm answer a question from the perspective of several jurisdictions? Can it give you the transactional experience in more than one location?”Now that Barclays has decided on its chosen advisers for the next two years, the upcoming raft of bank panel reviews will be keeping lawyers on their toes this autumn.