find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
Banks force firms to fight for work and fees

Banks force firms to fight for work and fees

CLIENTS HAVE reached boiling point in relation to cost increases and quality of work and are now taking action to ensure they are getting value for money.As “not enough change” has…

CLIENTS HAVE reached boiling point in relation to cost increases and quality of work and are now taking action to ensure they are getting value for money.

As “not enough change” has been made by law firms to improve the way they do business, ANZ has appointed a tough new strategy to select its external lawyers.

ANZ has announced the 32 firms on its new legal panel, which have been prescribed certain areas they are allowed to work depending entirely on the judgement of those outsourcing that work from inside the company.

Firms including Allens Arthur Robinson, Baker & McKenzie, Blake Dawson Waldron, Maddocks, Minter Ellison, Sparke Helmore and Piper Alderman will now have to continuously provide cost-effective and high quality work under a new firm selection and billing regime implemented by the bank.

In a system not unlike eBay, about 300 regular users of external legal services within ANZ go onto an internal site and input what type of legal work is needed. The site will bring up the firms accredited in that area, based on prior selection by the company, as well as their star rating.

A rating is achieved based on the previous work that each firm has done with the company, and will give their costs. “It is about giving our internal people better information at the time when they select a law firm,” said Margaret Harrison, deputy general counsel at ANZ.

“It is a two-tier approach that we took to this new panel. It has been a long time in the thought process — 18 months at least — it is about giving out the right information for people who use legal services,” she said.

The bank has long believed that law firms are not doing enough to cut costs, nor challenging the way they do their business. “There is a sense that there is not sufficient change coming form the law firms of their own initiative, which is the view that we have taken. So this is a move to drive some change. To not only cut costs, but also to improve efficiency. Firms that are truly specialist can do things quickly as well as more cheaply,” Harrison told Lawyers Weekly.

“It is still a concern that there is nothing to control legal costs except for the market. [We] didn’t have access to a lot of market information. They were not able to see whether one firm costs $600 an hour and another firm charges $550. This is high visibility of costs,” she said.

Australia’s largest law firms have for some time come under pressure to deliver better services for less money as their clients look for new ways to reduce costs.

In a 1997 tendering process at Westpac, the bank reduced its external legal providers from 37 to 9, The Australian Financial Review reported last year. Westpac reduced this number to six, meaning that its legal bill was slashed by 35 per cent.

Harrison said that in the case of ANZ, the company had in 2001 resorted to using six main firms and three specialists. “And we found then that there were issues with convergence. Again, the people we used were inappropriate for certain types of matters — there were no cost-effective options available to people — which is why we have gone down this path.”

She agreed that 32 was a large number of firms to have on one panel, but suggested that from the 32 firms that have been appointed, there will be a whittling down through the new system. “So, for example, if someone gets one star, which is a poor [rating], people won’t use them. So the system will drive people to use the best law firms. This is why it is quite a powerful driver to save costs.”

No firms have been dropped from the “big end of town”. However, while previously firms were able to cover all areas of work, they have now been channelled into particular areas and specialisation. Harrison rejects the idea that this means firms won’t be competing, noting that there is usually more than one firm in each specialisation.

“For example, you may have Freehills and Blakes accredited for employment, and you might, for example, have other [top-tier firms] accredited for mergers and acquisitions. But it may not be Blakes and Freehills. They are in areas that we feel they have specialty, taking into account a number of other factors, which were all in the tender process,” she said. “Now they are confined to certain work types.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Banks force firms to fight for work and fees
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Scales of Justice, ALA, right-to-die law
Oct 24 2017
‘Right-to-die’ laws would be a relief for terminally ill: ALA
The passage of an assisted dying bill through the lower house of Victorian Parliament has been haile...
Oct 24 2017
Diversity top of agenda for future WA Law Society president
The advancement of diversity in the Western Australian legal profession will be one of the key items...
Oct 23 2017
How to fail well
The legal profession is due for an attitude adjustment when it comes to perceived failures, accordin...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...