JPMorgan, Morgan Stanley join fee cutting drive
JP Morgan and Morgan Stanley are among a roster of leading banks attempting to slash fee agreements with panel law firms. Both banks are known to have contacted preferred advisers within the last month with a view to securing a reduction in fees - thought to be up to 15% - going forward. Banks including Lloyds TSB and Deutsche Bank are also understood to be in discussions with legal advisers with fees thought to be a key consideration.
November 27, 2008 at 12:58 AM
2 minute read
JP Morgan and Morgan Stanley are among a roster of leading banks attempting to slash fee agreements with panel law firms.
Both banks are known to have contacted preferred advisers within the last month with a view to securing a reduction in fees – thought to be up to 15% – going forward.
Banks including Lloyds TSB and Deutsche Bank are also understood to be in discussions with legal advisers with fees thought to be a key consideration.
A number of panel firms have confirmed that they have been contacted within the last month by financial institutions seeking reduced rates for work including transactions and ongoing litigation.
One partner at a panel firm said: "The mood is very strongly that we are going to get paid less. Banks have fewer profits and they thoroughly expect all relationship firms to share that pain.
"It is a question of reviewing rates rather than a genuine bid to kick firms off and if law firms believe the long-term business is worth it they will have to accept the negative impact over the coming months."
Another partner added: "The banks are looking to cut rates but a lot of firms have increased fees by 10%-20% over recent years. Some firms already give the banks a discount providing they receive a certain volume of work."
In the past Morgan Stanley has turned to firms including Clifford Chance and Freshfields Bruckhaus Deringer in the UK and Wachtell Lipton Rosen & Katz and Cleary Gottlieb Steen & Hamilton in the US. Meanwhile, JP Morgan has used firms including Simpson Thacher & Bartlett, Davis Polk & Wardwell and Allen & Overy.
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