They may have some of the toughest requirements of law firms' client rosters, but a request for proposal from a leading bank still sends many lawyers jumping through hoops for the chance to secure a coveted panel place.

There is no denying that banks drive a hard bargain when it comes to handing out work to advisers, and partners often bemoan the fee discounts, lawyers they are required to second and other benefits in kind. The extent of some banks' demands is such that it is not unheard of for partners at smaller firms to debate the merits of even pitching for a place given the degree to which rates are cut and the difficulty of meeting requirements such as providing in-house training.

However, as demonstrated by a recent report by TheCityUK, which found that almost half of all deal activity for the top 50 City law firms over the last five years came from financial services clients, the pure volume of work available for panel firms means banks remain very lucrative clients. In addition to the day-to-day roles advising on deal finance, the immediate post-crisis years threw up a run of litigation mandates for top firms. However, as our cover feature this week discusses, a new era of greater oversight from regulators is changing the dynamic of the bank/law firm relationship.

On the one hand, in-house teams are facing pressure to reduce costs after several years of multimillion-pound litigation expenses hitting bottom lines hard. This goes beyond a pure reduction in charge-out rates and includes a rethink of their use of external advisers as well as their own internal structure. In turn law firms have been forced to be more inventive with their offerings as banks sever their reliance on a small band of top-end firms for all their advice.

On the other hand, banks are only too aware of the costs of non-compliance and the clean-up culture is generating work in its own right for leading firms. With large investigations and review work having the potential to generate sizable bills, many are reinventing their offerings to capture this new line of work.

The onus is now on law firms to help banks spot potential problems before they arise as waves of further legislation on the horizon from regulators look set to guarantee a continuing line of work for lawyers. For as much as banks are sophisticated buyers of legal services and will continue to push back to ensure they get the most for their money, both parties are well aware their future successes are inextricably linked.