Barclays turned to a new model for managing its top 30 law firms two years ago and isn’t looking back, according to Chris Grant, who heads legal relationship management for the bank.
Companies that build long-term relationships with their law firms can see benefits that include an improved level of service and better alignment with corporate goals, Grant said. Barclays’ new structure also has benefited its law firms, he said.
Grant, who is based in London, Feb. 22 discussed with Bloomberg Law via email how Barclays’ relationship structure works.
Bloomberg Law: How many law firms does Barclays deal with in its relationship structure, and spread over how many countries?
Chris Grant: There are presently 30 firms that qualify for full relationship management with Barclays. These are based in the U.K. and the U.S., but all are global firms providing coverage across multiple jurisdictions. There is also a smaller number of firms that have proactively reached out and whom with we have a lighter-touch approach.
Bloomberg Law: Can you describe the relationship model the bank uses?
Grant: We have relationship teams in place with all 30 of our top firms (based on spend). The relationship model has a number of key elements:
Relationship Management Tools
- Clear set of expectations against which we can evaluate firms on an ongoing basis
- Feedback tools for lawyers to share performance feedback, based on the expectations described above
- Rating system for firms allowing us to differentiate between high-performing firms and those requiring development (with a full spectrum in between)—firms are evaluated against both cost and service delivery
- Regular reviews with our Legal Executive Committee
- Ongoing and active management of all firms
- Strategic plans allowing focused development for firms
- Relationship Account—system used to recognize “value add” contribution from firms. Also acts as a rebate mechanism based on spend levels
- Performance improvement plans for firms failing to meet expectations
- Structured quarterly face-to-face meetings covering performance; evaluation against the expectations and strategic development—firms are expected to own these meetings and Barclays ensures we provide the relevant support to achieve mutually beneficial objectives
- Small teams made up of representatives from the legal function (typically a senior Director/Managing Director and a VP); a member of my Relationship Management Team and a senior sponsor from the Legal Executive Committee (usually an MD and General Counsel for one of the Barclays Businesses). We leave it to the law firms to decide what the most appropriate representation is from them, but expect this to be a small number and ideally include a Business Development Manager. We will also insist on more diversity on the teams in the new panel term.
- Structured days/afternoons giving firms exposure to each other and the wider Barclays teams and senior leadership
- Opportunity for firms to gain better understanding of Barclays’ objectives and our expectations; also provides an opportunity for them to collaborate and work together
Bloomberg Law: Is this different from how other companies handle their law firms?
Grant: We know that other companies have relationship structures in place, but we hear from our firms that our approach is the most sophisticated. We are basing our approach less on a client/supplier dynamic and more on a win-win partnership. Law firms are telling us we have helped them improve in certain areas such as pitching, project management, etc. and that they are now applying a lot of what we do together to their other relationships.
Bloomberg Law: What are the benefits of this model?
Grant: For us, it gives us greater engagement with our firms and ultimately an improved level of service delivery. We are clear around what our expectations are and use these sessions to embed them. The current relationship model has now been in place for two years and has moved us away from “traditional” meetings where firms would simply ask for more work and lawyers would mostly congratulate each other on what good work they were doing. Our model is aimed at building a long-term relationship where firms truly act as an extension of the Barclays legal function.
Bringing excellent technical ability is a given; firms without this would not be on the panel. What we want are firms that are aligned to the Barclays way of working and that understand the constraints our lawyers are under. It is no longer acceptable to start working and allow the clock to tick; we need certainty, control, and ongoing management of costs. We as an in-house legal function are under significant pressure to demonstrate we are effectively managing our budgets; we need our law firms to help us do this. It is not about reducing costs, but making sure that we are paying the right price.
For firms, it means long-term engagement with Barclays. Those that are able to demonstrate that they can operate as “one firm” and provide a consistent service which is aligned to the Barclays expectations will benefit from the relationship model we have in place. We spend a lot of time working with our firms on their strategic plans; this gives them the opportunity to secure more work and expand their reach across the Barclays business, but only where it makes sense. Those firms that have actively engaged with the Barclays relationship team and made the most of their quarterly meetings have seen significant benefits reflecting the time and effort they have invested.
Ultimately it has improved the trust element in our relationship through increased transparency and integrity.
Bloomberg Law: Are there disadvantages?
Grant: For us, we have yet to see any disadvantages. I would say that there are disadvantages, however, for firms, at least for those that underperform. We are now in a position where we are actively managing our firms and have clear line of sight of performance over at least 30 of our key firms, which is the bulk of our work. For them it means that poorer performance stands out even more than it did before; and now that there is a dedicated relationship team within Barclays legal it means that something will be done about it. Lack of consistency in service delivery is quickly identified and quickly raised to firms. Ultimately, we are not here to make life hard for our firms, we want them all to perform as “A” rated firms. It makes life easier for our lawyers and gives Barclays a better level of service.
Bloomberg Law: In January, you spoke at the Corporate Legal Operations Consortium’s institute in London. There, you said that Barclays’ relationship with its law firms is a “two-way street.” How do the firms benefit from the relationship model?
Grant: When firms engage properly; make the most off the opportunities presented by the relationship model; and demonstrate alignment to the Expectations of Law Firms, they will position themselves to gain greater exposure to the Barclays team and ultimately secure more/new/different work—particularly when they actively pursue their strategic plans. Securing more work is only part of it, though—when used correctly, the Barclays relationship team becomes internal champions for the firms. Also, the central Relationship Management Team actively monitors firms, specifically against usage of the Relationship Account. When we see that firms are potentially over-investing and are not seeing returns on this investment, we are able to escalate and review the position with our Legal Executive Committee which will help bring balance back to the relationship.
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