The tug of war between The Royal Bank of Scotland and its go-to law firms over a proposed pay freeze ended in victory for the lawyers, as Magic Circle firms Clifford Chance (CC), Linklaters and Allen & Overy (A&O) won appointments to the bank’s legal panel for the next three years.
When launching its review in the summer of 2015, RBS asked law firms to freeze their rates in exchange for five years on the panel. Those who pitched at higher rates would receive spots for the three years the new panel runs from 1 January 2016.
However, most law firms pitched higher rates than their previous panel commitments – given their own increased costs from rising salaries in the City and higher real estate expenditure. One lawyer close to the panel review told Legal Business: ‘They are nearly all on a three-year term…read into that what you will. There were no major casualties.’
RBS sent letters out to all successful panel firms before Christmas, with CC, Linklaters and A&O retaining their spots on the firm’s top tier panel. Other firms to secure places on the refreshed panel were Norton Rose Fulbright, Macfarlanes, DLA Piper, Pinsent Masons, Simmons & Simmons, King & Wood Mallesons, Herbert Smith Freehills, Dentons, Ashurst, Scottish firm Brodies and Bristol-headquartered TLT. Reed Smith was one of a handful of US firms to secure a panel position.
Freshfields Bruckhaus Deringer and Berwin Leighton Paisner both won a spot on the bank’s customer transactional panel which means they can work for RBS clients.
The review is the first and last panel run by RBS general counsel John Collins, who resigned just 11 months after becoming the top lawyer at the leading high street bank in December. Collins had replaced retiring Chris Campbell as general counsel on 1 January 2015 but has resigned less than a year into the role to join Santander UK as director of legal, compliance, regulatory affairs and anti-money laundering in the second quarter of this year.
A City partner close to the process said: ‘They’ve been reducing the number of firms year-on-year so it would be counter-culture to see new names appear. In the time I’ve been working with them a lot of our rivals for certain types of work have disappeared from the panel. It’s been getting narrower. One of the mantras they’ve been rolling out over many years is the desire to reduce the usage of Magic Circle firms so it’s maybe a bit surprising that there’s still a lot of them on the list. The workload may be reducing but its noticeable there’s still a lot of them on that list.’