Westpac Banking is slashing its legal panel to two firms, cutting leading practice Clayton Utz out of the fray.
Mallesons Stephen Jaques and Allens Arthur Robinson have been retained on the panel, while the Australia-based bank will use top 10 firms and previous advisers Corrs Chambers Westgarth and Minter Ellison as principal corporate advisers and for general advice.
Niche practices Henry Davies York and Gaden Lawyers will also continue to act for the bank and will provide general legal services.
The cull is the culmination of the bank's long-term bid to reduce its panel.
Four years ago Westpac had 34 firms advising it but asked just 24 to bid for the work during 1999.
It is understood that Westpac has negotiated a series of fee reductions with the retained firms. Its move to question the rates charged by its legal advisers follows the example set by rival high street bank ANZ.
One senior Australian lawyer says: “ANZ put the squeeze on a couple of years ago and told its advisers 'if you want to stay with us then you have got to cut your rates' and people did.”
But he says it is doubtful the other main banks – The National Australian Bank and Commonwealth Bank – will follow Westpac and ANZ.
He says: “There is a history and certainly smaller companies have followed the trend. But if you want good lawyers you have to pay for them.”
Westpac is one of Australia's oldest banks with global assets of more than AU$140bn (£55bn) and is ranked as one of the top 10 listed companies on the Australian stock exchange.