Revolut is abandoning the traditional panel model in favour of a new system that will see external advisers assessed on an ongoing basis, bringing in new flexibility to switch firms and introducing AI tools to scrutinise performance.
The fast-growing fintech – which was recently valued at $75bn – is launching ‘Revolut Partners’, a new model which will assess firms on a quarterly basis, with no firms guaranteed a permanent partnership position.
Speaking with Legal Business, chief legal officer Tom Hambrett explained: ‘Feedback from our lawyers and data from our own engagement process gave us a consistent signal: our current panel process no longer reflected how work actually moved through the business.’
He continued: ‘Given the scale and complexity of Revolut, and the pace at which we’re expanding across markets and products, a static panel couldn’t keep up.’
The fintech currently works with six firms: Latham & Watkins, A&O Shearman, Baker McKenzie, Linklaters, Cravath Swaine & Moore and Davis Polk.
‘Firms can no longer solely rely on soft relationship touch points to keep their place in the squad’
However, Hambrett anticipates the new lineup will be larger under the new model, with an additional pool of firms ‘ready to step up the moment a first-choice partner falls short’, as he puts it.
Underperformance is defined by Hambrett as ‘poor client management, unmanaged scope creep, weak billing practices, a lack of responsiveness, or direct feedback from our lawyers that advice quality isn’t where it needs to be’, adding that ‘firms can no longer solely rely on soft relationship touch points to keep their place in the squad.’
The three core metrics that firms will be assessed against are speed, quality and cost. ‘They’re the three metrics we measure ourselves on, so they’re the three metrics the model should be built around,’ says Hambrett.
Hambrett acknowledges that implementing the new approach will be ‘a learning process’ and the fintech will continue to run RFPs and agree rates with firms for a defined period.
‘What we’re reserving is the right to review performance continuously rather than only at refresh,’ explains Hambrett.
In addition to the changes to the engagement model, Revolut will be updating the way it bills firms to crack down on any shortcomings in service delivery.
Hambrett said that the bank is building in-house AI tools to help lawyers run RFPs, pre-select firms for specific instructions and scrutinise advice and invoices
‘The firms we want around us are the ones who welcome being measured’
‘We are updating our billing guidelines and building our own internal model to review invoices against our billing guidelines automatically – flagging scope creep, time entries that don’t match the work, and rate inconsistencies,’ Hambrett told LB.
The new process is due to start at the end of Q2.
Hambrett explains: ‘The firms we want around us are the ones who welcome being measured. But this program also holds our own lawyers to a higher standard, as we need to provide clearer briefs, tighter scoping and more commercial discipline.’
As AI continues to provide new opportunities for in-house teams and law firms alike, the way in-house lawyers manage relationships with their external advisors is shifting.
In April, KPMG released findings that the vast majority of GCs expect their law firms to be fully transparent about how they are using AI and that value or outcome-based pricing is preferable to the traditional time-based pricing.
Other in-house teams – such as HSBC – have also been moving towards a more hands-on approach with firms.
Speaking with Legal Business in March, HSBC’s global head of legal external engagement Stephanie Hamon said: ‘We are going to need our partners to embed more into our workflows and our ways of working.’
From start-up to $75bn valuation: Revolut’s legal chief on a ‘once-in-a-lifetime’ role
