Barclays has put a ban on its 600 lawyers accepting corporate hospitality as it reviews its legal panel worth around £100m a year to law firms.
The UK’s second biggest bank informed its law firms at the end of February that corporate hospitality and entertainment is forbidden during the course of the panel review. The process is expected to conclude by 1 July.
In a missive from Barclays’ general counsel’s office, lawyers were told that the ban has been put in place to ensure a fair evaluation of law firms during the course of the panel review.
Barclays asked that its law firms submit details of corporate hospitality spending for the first time in 2011 as part of a previous review. The bank said at the time that this was to prevent breaches of the UK Bribery Act, which came into force that year.
This current review will see law firms compete for places on Barclays’ legal panel for the next two years. It is being led by Stéphanie Hamon, the bank’s head of commercial management, who was drafted in last December to run the procurement process.
Barclays currently runs a two-tier panel of ‘preferred’ advisers for big-ticket M&A and litigation, while ‘approved’ firms are typically used for low level work. Magic Circle firms Freshfields Bruckhaus Deringer, Clifford Chance, Allen & Overy and Linklaters are all ‘preferred’ advisers, alongside elite US firms Cleary Gottlieb Steen & Hamilton, Skadden, Arps, Slate, Meagher & Flom, Latham & Watkins and Sullivan & Cromwell. Other firms on the current line-up include Addleshaw Goddard, DLA Piper, Hogan Lovells, Simmons & Simmons, Eversheds, TLT and Shearman & Sterling.
A senior lawyer whose firm is on the current Barclays panel said: ‘With so many rugby and football tournaments on it’s a great shame that this policy has been introduced.’
Barclays spent £12.2bn on misconduct, through regulatory fines and litigation, between 2010 and 2014 according to UK-based CCP Research Foundation. Even with the raft of disputes and regulatory investigations against the banks gradually coming to an end, the bank’s law firms have been hiring aggressively to grow their financial services regulatory teams as the EU and UK governments implement stricter regulation on the sector.
Barclays set aside £1bn in October to meet the costs of the Bank of England’s ring-fencing rules requiring banks to separate their retail arms from supposedly more risky investment banking divisions.