Royal Bank of Scotland (RBS) has kicked off a much-anticipated review of its legal panel, with tender documents sent out to law firms late last month.
Firms have until 22 June to submit their pitches to RBS, with the online tender widely expected to result in the bank’s list of preferred advisers being scaled back.
The review will cover all of RBS’ panels, including its core transactional roster for clients, a transactional panel for the bank’s own deals and a debt recovery line-up.
Successful firms are expected to be appointed in the autumn for a three-year term running from January 2013.
According to partners who have seen the tender document, the bank is putting an emphasis on legal process outsourcing (LPO), with law firms seeking positions on the panel required to demonstrate they have sufficient capabilities in place.
It is understood that the remaining terms are broadly similar to RBS’ last review in 2009 in terms of chargeout rates and value-added services, in contrast to previous reviews which have seen the bank push advisers hard on fees.
Linklaters has traditionally been RBS’ main corporate adviser, with other firms appointed to the roster in 2009 including Ashurst, Allen & Overy (A&O), Berwin Leighton Paisner, Freshfields Bruckhaus Deringer and Herbert Smith.
Between 60 and 80 law firms are thought to have been selected in total across RBS’ various legal sub-panels during the last review but, although the latest tender document does not specify numbers, partners expect the new line-up to be significantly smaller.
One partner said: “I know from discussions with RBS that they do have an overall aim of reducing the panel. The review is of all of RBS’ sub-panels, but the main focus is always the core transactional panel.”
Legal Week has previously reported that firms frequently bill the bank at a discounted hourly rate of around £350, compared with £450-£500 for other major financial institutions.
However, the bank’s weaker financial position (it received a £45bn Government bailout during the credit crunch) and reduced work flows have prompted advisers to speculate that it would struggle to secure further reductions in fees.
News of RBS’ review comes as Lloyds Banking Group gears up to launch a review of its legal panel later this summer, with early discussions between Lloyds and advisers already taking place.
The roster was last overhauled in October 2010 when the bank drew up its first combined panel for legacy Lloyds TSB and HBOS. The line-up at that point included firms such as A&O, Linklaters, Clifford Chance, Hogan Lovells, SNR Denton, Norton Rose and Herbert Smith.