Barclays to law firms: no more panel reviews

Barclays is set to begin its last-ever conventional panel review, as it aims to move away from “resetting the clock every two years” with a new system that will see external advisers assessed on an ongoing basis.

The bank, which handed two-year panel appointments to 140 firms in its last review in July 2016, will carry out its last official refresh in the coming months, after which it will move to a new system it describes as “active relationship management”.

Once the next – and last – review has been completed, firms will be added or removed from the panel on an ad hoc basis.

Following the 2016 review, Barclays implemented a number of changes to how it manages relationships with its law firms. This included the creation of a rating system grading panel firms on a number of metrics, including billing rates, service delivery and alternative fee arrangements, as well as feedback gathered from the bank’s in-house lawyers.

Barclays’ head of external engagement Stephanie Hamon said: “This is going to be our last official panel refresh, because we have seen and demonstrated how active relationship management is actually delivering far more benefits for both the in-house and external legal teams. Therefore we are going to dispense with a panel process entirely.”

If you keep resetting the clock every two years, you can’t really build relationships

Chris Grant, the bank’s head of relationship management, added: “We are assessing firms against a few metrics. One is looking at their service delivery, such as the way they engage on a regular basis with our lawyers, and the way they interact with Barclays versus the cost element.”

The grades – which are currently assessed annually – are not fixed, and firms will be encouraged to take on board feedback to improve their score.

“[The grading system] gives you a point of conversation to develop relationships,” said Grant. “If you have firms sitting in one of the lower categories, it won’t prevent them from securing work or unnecessarily penalise them. Instead, it is a way of being able to develop and improve the relationship. Ultimately, from our perspective, we would like help all firms become A-rated firms.”

Hamon concluded: “Panel refreshes are not supporting what we want to do. What we really want is our relationships to be a win-win partnership and for us all to develop. If you keep resetting the clock every two years, you can’t really build those relationships.”

Barclays’ last panel review saw it cut its panel by around 60% from around 350-400 to 140 firms, with no new firms joining the list.

Ashurst, Hogan Lovells, Simmons & Simmons, Addleshaw Goddard, Eversheds, Bond Dickinson, DWF and Reed Smith were among those retaining spots on the roster, which is split into three tiers – panel firm, core specialist firm and specialist firm.

The bank declined to comment on the likely structure of the next panel.