Lloyds Bank is set to cut back the number of law firms on its UK panel in a review that will kick off in the new year.

The bank has told its UK legal advisers that it intends to start the review in January, and that it is likely to reduce the current line-up of eight firms.

The eight firms on the panel are CMS, Eversheds Sutherland, Herbert Smith Freehills, Hogan Lovells, Linklaters, Allen & Overy, Ashurst and Addleshaw Goddard.

The bank previously appointed panel firms to two-year terms; however, one partner close to the process said that during the last review, law firms agreed to fix their fees for three years.

The partner added: "The emphasis now is on generating a strong value proposition, including demonstration of efficiency and innovative and flexible working models. Lloyds also wants firms to demonstrate how we manage and minimise risk, especially regarding data and cybersecurity."

The bank is expected to send out request for proposal documents in January, with the entire process set to take about nine months to complete, with the new panel appointed by Q3 of next year.

It is understood that Lloyds general counsel Kate Cheetham will lead the review process.

Lloyds' last UK panel review took place in 2016, when the eight firms now on the panel all retained their places, with DLA Piper and Norton Rose Fulbright losing out. Earlier this year, panel firm HSF advised the bank on its £11m investment in UK banking software company Thought Machine.

A Lloyds spokesperson said: "Our panel is due for renewal next year and the outcome of the review will determined by a rigorous and competitive tender process."

Lloyds recently announced that Cheetham will take on the role of group company secretary next year, as well as continuing in her role as GC. She will succeed Malcolm Wood, who announced he would be retiring after Lloyds' annual general meeting this June.