BNP adds City firms to panel as RBS prepares for tough adviser review

Hard negotiations on the way in this year’s round of bank reviews

BNP Paribas has confirmed the line-up of law firms on its new global legal panel, with Freshfields Bruckhaus Deringer and Herbert Smith winning places.

Details of the panel have been confirmed as leading firms predict an extensive overhaul of the Royal Bank of Scotland (RBS) legal panel, with the bank’s deputy general counsel John Collins and GC for corporate and M&A Rushad Abadan set to kick off a review in the coming months.

BNP Paribas launched its review in June with the intention of expanding the roster to take into account its increasingly global reach. In addition to first-time appointments for Freshfields and Herbert Smith, Allen & Overy (A&O), Clifford Chance, Linklaters, Hogan Lovells, Norton Rose, Cleary Gottlieb Steen & Hamilton, White & Case and Gide Loyrette Nouel have all been reappointed to a now 10-strong line-up.

Herbert Smith’s appointment to the French bank’s roster was widely expected, as a number of the firm’s international offices have acted for the bank off-panel, while the review was led by the firm’s former Paris banking head, Georges Dirani, who became BNP Paribas’ global GC in October 2010.

It is understood Dirani also appointed a number of other firms in certain select practice areas, although he declined to comment further 
on the exercise.

Separately, RBS is gearing up to invite firms to pitch for its panel, which is due to be agreed later this year and will take effect from January 2013.

RBS, which counts Linklaters as its primary adviser, is known for being particularly tough on rates for panel firms, with some City partners suggesting they frequently bill the bank at a discounted hourly rate of around £350, compared with £450-£500 for other major financial institutions.

A review by Societe Generale concluded last month is also understood to have seen the bank push firms heavily on rates.

During its 2009 review RBS offered firms fast-track access to its panel if they agreed to a 10% cut on 2006 rates. However, some partners suggest the bank, which received a £45bn government bailout, making it the largest UK banking failure, would be hard pushed to continue to squeeze firms on rates given its poor financial position and the predicted loss of thousands of investment banking jobs.

One financial services litigator at a top 10 City firm said: “Realistically, RBS should slash its panel in half. Firms should step up and say that it is not lucrative for them to be on a panel with those rates. But instead I expect that RBS will attempt to cling to its position as a key banking client and continue to push for low rates.”

chris-campbellA City finance partner added: “It has got to remain worthwhile for firms to continue to act for [RBS]. Firms may sign up to discounted partner rates but will be unwilling to actually place partners on deals at the rate of a third-year qualified lawyer.”

At least 19 firms were appointed to RBS’ existing panel, which has been running since 1 January 2010, including Ashurst, A&O, SNR Denton, Linklaters, Berwin Leighton Paisner, Freshfields, Herbert Smith and Norton Rose.

Commenting on the latest process, RBS group GC Chris Campbell (pictured) said: “The review is in its early stages and it is too early to say what size the panel will be, but it does not necessarily follow that it will reduce in size. The team leading the process is currently assessing the panel criteria and will communicate with panel firms in due course.”

Related: Paying the piper – can law firms’ love affair with banks survive a series of tough panel reviews?