Incoming RBS general counsel Chris Campbell is considering introducing a Mexican wave-style relationship between his panel firms in a bid to reduce the bank’s £200m annual legal spend.
Deputy general counsel Campbell, who will take control of the legal function when current chief Miller McLean retires at the end of April, is floating the idea of having lower cost base panel firms take on the commoditised elements of deals that would normally be handled solely by its top-billing advisers.
While the plan is still in an embryonic stage, one source close to the bank said it could be in place by the end of the year.
It is understood that Campbell favours this approach to using a legal process outsourcer (LPO) because it would allow him the potential to slash costs while continuing to work with firms with which the bank has longstanding relationships.
While the process would require the partnered firms to work closely together to avoid issues such as duplication, the source said its panel firms were chosen with potential cooperation
“The panel had a very good review process [in 2009] and is pretty well evaluated,” added the source.
Firms on RBS’s legal panel include Linklaters, which handles all of the bank’s top-end work and was by its side throughout the financial crisis, Eversheds, Freshfields Bruckhaus Deringer, Halliwells and Herbert Smith. Campbell was unavailable for comment.
The measures are part of a wider crackdown on costs that was started as part of the recent panel review. Firms were asked to ensure they were committed to value-added services, such as supplying secondees, while also reducing their fee levels by around 10 per cent.
Rushad Abadan, head of group transactions and projects at RBS, said of the panel review: “Cost is obviously a focus all the time. We try to negotiate bespoke fee arrangements for every transaction we do. I’m keen on fixed arrangements where this is appropriate.”
Abadan’s six-lawyer department is overseeing the bank’s restructuring, which will see it divest numerous businesses, including its branch network in England and Wales, RBS Insurance, Global Merchant Services and the bank’s position in RBS Sempra Commodities.