External counsel to be reviewed on global and regional level

Bank of America Merrill Lynch (BoA Merrill) has embarked on its first full-scale panel review since becoming a merged entity, with a number of stringent conditions attached for firms wanting to pitch.

The review, which was launched last month, will see the investment banking giant review its external legal counsel arrangements on a global and regional level.

New York-based deputy general counsel (GC) Bill Caccamise is leading the process, supported by Charlotte-headquartered global GC Ed O'Keefe.

The bank is understood to be driving a hard bargain on fees and placing a number of conditions in its request for proposals as it looks to concentrate legal spend across a fewer number of legal advisers globally.

In order to be considered for the panel, firms must be willing to charge out trainees at paralegal rates, as well as accept no payment on aborted deals in certain areas of business.

The bank is also strongly resisting paying internal law firm expenses and is calling for discount models that apply across all regions and practice areas.

Commenting on the terms, one US law firm partner said: "It's death by a thousand cuts. You are forced to accept the panel terms and these usually become the starting point [for further discussions].

"In general clients are more carefully reviewing bills and trying to knock out time that is seen as inefficient or duplicative," he added.

A number of City law firms are understood to be pitching for the panel, with a majority having had stronger relationships with the more European-focused Merrill Lynch side of operations.

Linklaters was traditionally one of Merrill's leading advisers, while City rival Allen & Overy also had established links. Other City firms that have worked with the bank include Herbert Smith, legacy Lovells and Simmons & Simmons.

Historical advisers to Bank of America include US firms Mayer Brown, Paul Weiss Rifkind Wharton & Garrison and Skadden Arps Slate Meagher & Flom, as well as Clifford Chance in the UK.

The merger of the two banks was completed in January 2009.