The review, UBS’ first in five years, is set to shrink the bank’s cross-border panel, which currently includes Baker & McKenzie, Clifford Chance, Allen & Overy (A&O) and Freshfields Bruckhaus Deringer.
The Swiss-based bank said the move is in response to increasing legal bills which now account for 1% of UBS’ total annual revenues, which stand at SFR$48bn (£20bn).
The review will run alongside UBS’ new system of ranking its outside counsel in which it will award firms points from one to five across seven areas, including speed of work, quality of skills and cost, and will be referred to several times a year.
Around 100 of the bank’s in-house lawyers have been scoring firms since June and UBS’ legal chiefs will meet to review the results for the first time on 1 November.
Speaking last week alongside A&O senior partner Guy Beringer and Linklaters managing partner Tony Angel at a Legal Week event, UBS general counsel Peter Kurer said that the bank’s legal bills were too large not to be analysed and that it was important that both firms and clients take steps to improve efficiency. Kurer said the overall scores given to firms would be looked at carefully when UBS next reviews its panel in two-to-three years’ time.
The system was devised by in-house lawyers Bernhard Schmid and Christoph Kurth, respectively general counsel and litigation head of UBS’ group legal function.
Kurth said: “It is in advisers’ interests — it is not just playing around with rates. This sort of up-to-date data can be pulled up in meetings — it will really improve discussions and I would not be surprised if it means that we reconsider our list of advisers after a couple of evaluation cycles.”
Commenting on the move, one managing partner at an advisory firm said: “I have not seen anyone else setting up an organised league table of legal advisers and then making the decision about who they employ based on positions in the table. I would say it makes them very open to bribery.”Talkback: Has the worm turned? Can the banks get a handle on fees? Post your comments here
