Legal Week: Bluechip GCs maintain drive towards large panel mandates

Richard Wiseman above, is Shell General Counsel (Mergers & Acquisitions). *Formally a Shell director, Mr Wiseman to his credit, has acquired a global reputation (with our help), as a purveyor of candid admissions on behalf of Shell. Perhaps this explains his apparent fall from grace. We are delighted in any event to have a nice photograph to use on leaflets. We know he was unhappy with the version previously used.

THE ARTICLE

Client report shows top companies will further slash panels to build adviser links
 
Overstretched legal departments at the UK’s leading companies are preparing to outsource more work to their advisers as they struggle to cope with an expanding corporate workload, according to a survey of nearly 300 companies.

However, the number of law firms benefiting from such largesse is set to decrease over the next 12 months as general counsel resolve to further reduce the size of their panels.

These are among the headline findings of the latest Legal Week Intelligence Client Satisfaction Survey, which quizzed 297 general counsel and other senior decision makers at FTSE 1000 and AIM companies about their law firm hiring policies.

The poll, which points to a dip in client satisfaction levels as law firms battle to cope with an explosion of work, confirms that general counsel have taken advantage of buoyant market conditions to increase their internal headcount.

But while they have been able to do more specialist legal work such as employment and competition, attempts to keep a lid on external spending are being undermined by the sheer volume of corporate work, which now accounts for 29% of legal spending within FTSE 500 legal departments, up from 24% in 2005.

Asked if they expected their corporate workload to increase in the next 12 months, 44% of the respondents from FTSE 500 companies replied ‘yes’ while nearly one in four said the proportion of such work they farmed out would also increase.

However, there is no sign of the trend letting up for the largest companies to channel their work to fewer firms. Thirty-five percent of respondents from companies with a legal spend of more than £6m said they planned to reduce the number of firms they instruct in the next 12 months. Companies in this category currently instruct an average of 18 law firms.

Richard Wiseman, M&A general counsel at Shell, told Legal Week: “We had a weeding-out exercise a couple of years ago because using fewer firms helps to build closer relationships — they know our business better and we know their strengths and weaknesses better.”

The survey found that the most important factors when deciding whether to instruct firms were their reputation, the department’s previous experience of using them, and cost — in that order.

It also uncovered resistance among larger companies to liability caps and a desire for firms to have a clear conflicts policy. General counsel identified law firm policies towards liability caps and conflicts as significantly more important factors when choosing who to instruct, rather than their global reach or their diversity policies.

The Client Satisfaction Survey is out now. Email: [email protected]

Author: Georgina Stanley
Source: Legal Week
Start Date: 26/10/2006
End Date: 02/11/2006 

* Comment added by ShellNews.net

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