Shell wields axe to create global panel

Embattled oil giant to hack £54m legal spend; blue-chip panel to be slashed to five

Shell International has launched a global panel review in order to slash its spend on external firms, which currently exceeds $100m (£54m) annually.

Every one of Shell’s operating companies, spread across 165 countries, is conducting a parallel review of their local law firms.

Shell legal services coordinator Clive Grant, who is running the process with UK general counsel Richard Wiseman, said: “The aim of the exercise is to build closer relationships with a number of the international firms which Shell already uses and to reduce the overall cost of external legal spend. The exercise represents an evolutionary, rather than revolutionary, step in Shell’s relationships with its external law firms.”

The FTSE 100 company currently uses more than 20 firms for international work, including Allen & Overy, Baker & McKenzie, Clifford Chance, Cravath Swaine & Moore, Denton Wilde Sapte, Simmons & Simmons and Slaughter and May. It intends to cut this list to just four or five firms which have the capability to act for the company across a number of practice areas, plus another list of 10 firms to be used for particular pieces of work.

“The list is not an exclusive panel, but rather a list of firms which Shell companies across the globe look to first when they need support from international, rather than local, firms,” said Grant.

The review follows the appointment of Beat Hess as global legal director in March last year. Hess heads the Shell legal services management team, which expects to produce its final list of firms in September.

A shortlist of firms has already been drawn up and discussions with those firms about quality, efficiency and cost will determine the final list.

Shell has one of the world’s largest in-house teams with more than 600 lawyers and IP professionals and in-house legal advisers in 65 countries.