#40 The Legal Profession This Week - Are Big Banks and BigLaw No Longer Best Friends?​

By Dheepa​

Big Banks and BigLaw - No Longer Best Friends?

It’s a borrower’s market - not just when negotiating deal terms but also when it comes to choosing law firms that advise on a deal. Major lenders no longer dictate who their advisors will be. On private equity deals, the norm is now for the private equity firm to choose a bank’s legal advisor for the transaction. Should the bank refuse, they lose out on working the deal themselves.

For most UK law firms, this makes the current dominance of US law firms even harder to fight. They can no longer rely on their deep relationships with leading London banks to secure even some of the lucrative fees that buyout deals bring. Law.com reports that some firms are increasingly choosing not to pitch for places on bank panels, such as Freshfields Bruckhaus Deringer’s decision not to pitch for the Royal Bank of Scotland panel. There are simply better chances for a more rapid growth in revenue when firms focus directly on private equity and funds work. Since law firms may now view the private equity firm on the other side of the deal as the ultimate client, it could lead to a conflict of interest when advising the banks.

This is not the only reason the traditional banking clientele is falling out of favour with law firms. Some partners note that bank panels are too large and law firms are not guaranteed a meaningful cut of the work that comes through (Law.com). For example, in 2016, Lloyds Bank cut an estimated 210 law firms from its existing panel - only to still retain 140 firms. Many banks have also significantly reduced their legal spending on transactional work which is often the most high value and profitable work for law firms. Instead, banks are increasingly seeking advice on regulatory work.

The combination of lower value work and high competition, even within a panel, means relationships with leading banks are less of a priority for law firms than ever before.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Latham & Watkins and Goodwin Procter are advising private equity firm Permira on its acquisition of two Italian pharmaceutical companies. The newly combined companies will reportedly have sales of over £1.1bn and are set to become a new global player in the pharmaceutical industry.

DLA Piper represented the Premier League in a successful claim for $200m. The defendant’s PPLive Sports entered into an agreement with the Premier League to broadcast both live and delayed Premier League matches in China and Macau. The court ordered the $200m be paid to the Premier League for PPLive Sports' failure to uphold the amount due under the original agreement. PPLive Sports were initially being represented by Quinn Emanuel Urquhart & Sullivan before the firm withdrew due to the company’s failure to settle a substantial amount of legal fees due (The Lawyer).


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