US investment bank Lehman Brothers has extended its main UK legal roster, adding top 10 City firm Simmons & Simmons to its list of preferred advisers.

Simmons, which has been doing an increasing amount of work for the bank over the last 12 months, joins Lehman's established UK advisers – Linklaters, Allen & Overy, Ashurst, Lovells, Freshfields Bruckhaus Deringer and Weil Gotshal & Manges – following a review that also saw the bank crack down on fee arrangements with outside counsel.

Panel firms told Legal Week that the bank was trying to push down on fees with its relationship firms in response to the market downturn.

The review began at the end of last year and was led by Lehman's London-based corporate counsel, Ian Jameson, alongside the bank's procurement arm.

One partner at a panel firm commented: "The market downturn has helped focus everyone's minds on costs. The banks were making such huge profits last year that costs were not such an issue. In the current climate profits are dropping fast and people are looking to cut back on costs wherever they can."

Lehman also has three specialist panels for real estate, investment banking and fixed income work, which includes derivatives and structured finance advice.

News of the panel reshuffle comes as Lehman readies itself to lay off 1,425 staff – around 5% of its global workforce – in response to the effects of the continuing global market slowdown.

A spokesperson said that while the cuts would affect all divisions of the bank in all locations, the bulk of the cuts would hit the bank's US workforce.

Lehman, the US' largest underwriter of mortgage-backed bonds, is widely expected to announce significant writedowns when it releases its first-quarter figures next week.

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