DLA Piper misses out as bank sets out new categories
Barclays picked a raft of firms, including Clifford Chance, Ashurst, Simmons & Simmons, Hogan Lovells and Reed Smith, as the banking giant overhauled its global roster last month and slashed its number of go-to advisers by over 60%.
Eversheds, Mayer Brown, Pinsent Masons, Addleshaw Goddard, DWF and Bond Dickinson also made the cut, while longstanding adviser DLA Piper lost its place as the number of firms was reduced from between 350 and 400 to less than 140.
The process, led by head of commercial management Stéphanie Hamon, also saw Barclays change from its two-tier system of ‘preferred’ and ‘approved’ firms to three groupings: panel firms, core specialist firms and specialist firms. Hamon stressed this was not a ‘tiered approach’, although Barclays will have a stronger relationship with panel firms with regards to investment and innovation.
Speaking to Legal Business, Hamon said: ‘It is misleading in a way because people tend to get really hung up on the word “panel” and see it as the Holy Grail. Law firms are saying that they would rather be in the core specialist category because that is a reflection of where they are at in terms of their relationship with us.’
Barclays had a pre-selection period, which involved due diligence with selected firms and a review of internal function to understand where improvement was needed. Following this, Barclays redesigned the roster and invited 30 firms to tender as panel or core specialist firms.
In the new structure there is flexibility for firms to move between panels, with core specialist firms ideally placed to be considered for the panel in future. A legal executive committee headed up by group general counsel (GC) Bob Hoyt and including group centre legal GC Simon Croxford, global head of litigation Stephanie Pagni and UK GC Mark Chapman will monitor firms’ status every six months to ensure the categorisation remains accurate.
As previously reported, Barclays’ value account system, where firms are required to pay a rebate if they fail to hit their value targets, whether in the form of secondees, volume discount or bespoke training, has been extended to all law firms and is now based on revenue threshold.
The bank also introduced a three-card rate system, asking firms to price mandates according to strategic, medium and flow, covering everything from high-end mandates to process-driven work. According to Hamon, this pricing structure applies mostly to panel and core specialist firms because of the nature of their coverage.
‘We would be happy to pay the right price for strategic advice but wouldn’t pay the same for flow work. Our ultimate aim is to move completely away from hourly rates,’ she added.
kathryn.mccann@legalease.co.uk