Banking giant Barclays has told panel firms that they should team up as single units as part of its latest panel review process.
The bank is asking firms to collaborate and submit shared letters of engagement, single bills and single relationship partners to lead the group.
In recent years Barclays has taken the lead on collaborative working and partnered firms together. Now it is handing the reigns to its advisers and requesting that they take the initiative to a new level.
The increased pressure on collaboration is part of the bank’s current panel review, expected to be unveiled next week (18 December 2013). The new-look roster is the first since 2011 and follows Barclays’ decision to scrap biennial reviews last year (14 January 2013).
Deputy general counsel Michael Shaw said the in-house team was putting the onus on firms by asking them to present ready-made partnerships to the group with single contacts for the in-house team.
He said: “We’ve done it ourselves in the past (come up with the teams) and now we’re saying why don’t you help us and save us having to do the hard work by putting you together.
“Lawyers think of themselves traditionally as being involved in an entire end-to-end process but in reality any end to end process consists of tasks. Once you identify that you can determine who is the best supplier for what.”
The bank divides mandates among over 100 panel firms, which include Clifford Chance, Addleshaw Goddard and Hogan Lovells. The roster was previously divided into a general advisory group and set of 15 sub panels but is undergoing an overhaul.
The next list is expected to be divided between a roster of general advisers, named preferred advisers, and a roster of specialist firms, to be called approved advisers. Firms are on tenterhooks over the results, originally due last summer before the bank scrapped its practice of bi-annual reviews.
The focus on collaboration and the debundling of mandates into tasks continues the bank’s drive to reduce duplication on roles and drive efficiency.
In 2011 the bank added 50 firms to its roster, taking the total to 100, but removed the magic circle from several niche panels in order to cut out duplicated roles (4 July 2011). Allen & Overy (A&O), Freshfields and Clifford Chance all lost out heavily, despite the addition of three new sub-panels and general increase in roster size.
Previously litigation and M&A deals have been the target areas for collaboration and dividing up work.
However Shaw said: “Most transactional activity or projects or cases is capable of being segmented into underlying activities.”
“We’d have one firm leading, managing , one bill, one set of liabilities, one set of touch points, everything could be coordinated if we were able to go that far and on some transactions we have got that already.”
A source close to the bank said: “You might polarise the instruction so you have a low cost firm doing the lower value litigation or part of the work like doc management then you might have a big magic circle doing the other end.”
“A long time ago, ten years ago, everyone wanted to do the big stuff and no one wanted to do the little stuff, nowadays most do get it and realise you’re better off being part of the party than standing on the outside.”
Despite the launch of Mexican wave innovation fifteen years ago collaboration between firms has failed to take off as anticipated. However sources said that in-house counsel were increasingly waking up to the concept.
Bigger in-house legal teams, tighter budgets and the desire to take better control of external mandates were all drivers towards collaboration, said sources. The Lawyer’s rountable on the topic last week revealed that industry leaders felt the same way (20 June 2014).
Royal Bank of Scotland (RBS) is also understood to be pushing its panel firms to work together more in a bid to drive efficiency (23 June 2014).