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Enter A&O, exit CC for Aviva’s top roster but insurance giant drives a hard bargain

Allen & Overy (A&O) has won a place on Aviva’s top corporate panel after a lengthy review that saw Clifford Chance (CC) lose its spot as plc adviser.

The move comes as Aviva also kick-started its UK and Europe panel selection process in mid-April, following an overhaul of its 280-staff global legal team.

The review of the plc panel was led by general counsel (GC) and company secretary Kirsty Cooper and Aviva Group GC Monica Risam (pictured).

A&O joins the re-appointed Slaughter and May, while previous panel member CC had pitched alongside Linklaters for a coveted advisory spot.

Plc panel firms will be called on for Aviva’s strategic corporate and contentious work. In order to secure a place on the panel, advisers were required to give assurances that they will act for Aviva in a wide context, including potentially against a bank.

The latter assurance is a surprise move for finance leader A&O, which has entrenched relationships with many of the world’s leading financial institutions. Aviva’s A&O relationship is led by head of the insurance group, Philip Jarvis, and corporate finance partner David Broadley. At Slaughters, meanwhile, Aviva’s relationship partners are Jonathan Marks and Richard Smith.

Aviva’s Cooper told Legal Business: ‘You can’t sell yourself to a FTSE 100 company and say you are conflicted from acting against any major bank.’

The review was particularly rigorous and saw partners put in front of a number of Aviva’s heads of business in order to test their ability to advise the company’s top management. Cooper added: ‘They need to be able to build a relationship with our key stakeholder functions such as finance, treasury and M&A.’

Risam added: ‘You could see the ones who did well and those who were uncomfortable.’

Driven by Aviva’s procurement team, plc panel firms offered discounts of 15-25% on standard rates. This pricing structure is being used as a guideline for the 25 firms recently invited to pitch for Aviva’s UK and European panel. Requests for proposals (RFPs) were sent out in mid-April, with results expected to be announced in June.

Firms invited to pitch include Ashurst, Latham & Watkins, Willkie Farr & Gallagher, Pinsent Masons, Berwin Leighton Paisner, Clyde & Co and DLA Piper. CC and Linklaters have also been invited to pitch again, while Risam said Slaughters and A&O will be ‘grand-fathered’ onto the panel by virtue of their appointment to the plc line-up.

The RFPs have been sent out to firms in the UK, Ireland, Italy, Spain, France, Turkey, Poland and Asia. As all the firms invited to pitch are already known to Aviva and have been tested in roles they have undertaken for the company, the panel selection process will largely focus on ways to achieve the best cost arrangements. Risam said: ‘The natural next step is that we are leveraging across the function. We are trying to get the maximum bang for our buck.’

The selection process had been delayed by the extensive restructuring of Aviva – including the legal team – after acting chief executive John McFarlane last year decreed the insurance giant needed to focus on its core markets, sell off under-performing businesses and cut staff.

Last year the legal team downsized by 10%. As a result, it looks unlikely to lose staff in the latest round of 2,000 redundancies announced in April this year.

Cooper said: ‘[McFarlane] felt that Aviva was too bureaucratic and wanted it to be more nimble. He conducted a review of all businesses and functions with the aim of de-layering and restructuring them and that applied to legal.

‘We lost 10% of our headcount last year. We tried to do it by natural wastage but we had to lose a couple of lawyers in the process.’

Click here for more GC coverage. See Legal Business next month for more on Aviva and its shake-up.