Bluechip panels still attract firms but some appointments are more equal than others

With the likes of General Electric (GE), Santander and Barclays among the institutions putting legal advisers through their paces over the last few months, some law firms haven't been slow to advertise their success at securing new appointments – confidentiality agreements permitting.

And why not? At first glance winning a place on one of these sought-after bluechip panels seems quite a coup, with benefits that should clearly outweigh the costs of discounts, secondments and training given away by firms keen to secure big-name clients.

A closer look at the final line-ups, however, shows that the cost/benefit ratio isn't always so clear cut. GE, for example, took 18 months to shrink its roster of European non-M&A advisers but, in the end, still named some 97 law firms. Granted, this is a significant improvement on the 270-odd firms it worked with before the review, but the figure is still nearly 25% higher than the 80 firms the company said it hoped to instruct as recently as April. Similarly Barclays has some 53 firms on its overall list of panel firms.

Of course, both institutions divide their advisers into sub-panels by speciality and/or geography. Barclays has 10 specialist panels in addition to its main advisory roster and GE has a similar number, and that is excluding its prestigious European M&A panel.

The reality remains that being asked to join the panel is sometimes only the beginning. And, while some firms feel that the lengthy pitching processes are worth it, others are less convinced.

Clearly all of these major institutions are big enough and powerful enough that most firms are unlikely to start refusing to work with them. For example, while a partner at one of the firms working with GE admits that the company expects its advisers to put in a huge amount of effort just to get on the panel, he also concedes that there's no way the firm would not pitch for the work. Such is the prestige of the appointment.

But behind the scenes resentment is building at some advisory firms. Perhaps most telling is the stance of Freshfields Bruckhaus Deringer. The firm was one of only five firms named onto GE's first-ever European M&A panel in October 2007 but last year the pair 'mutually agreed' that it would no longer sit on the roster.

The underlying issue is that, while law firm complaints about being pressed to offer more value in the middle of a recession won't get much sympathy, some panels are far better run than others. In some cases, firms are asked to spend substantial time and money pitching only to find a place means little work or that the company frequently goes off-panel (to be fair, Barclays and GE are cited by some partners for making sure approved advisers do get respectable levels of business).

In some cases, the basic concept of demanding better terms from advisers in return for a certain level of work just isn't followed; some banks are notorious for banning panel firms from working against them despite handing out little or no work. A relationship is always a two-way thing. Clients are right to press for more value but they should make good on the promises they make to secure it.