Shell is heavily thinning the legal panel from 250 to 6 law firms

Posted 3 years ago in topic Energy

Shell has severely reduced its collection of global preferred advisers from two hundred and fifty to just six globally active law firms, The Lawyer reports. As of May 1, Allen & Overy, Baker & McKenzie, Clifford Chance, Eversheds, Norton Rose Fulbright and Reed Smith are the chosen ones.

The renewed legal panel has been appointed for a period of four years, although the rates will be re-evaluated in May 2018. The six elected global firms advise Shell in all possible jurisdictions and jurisdictions worldwide, although the lion's share of the work will be performed from the United States and Great Britain. Shell appoints one permanent contact person for each law firm: the relationship general counsel.

The "global panel" does have support in some jurisdictions in the form of twelve "local panels", which will consist of three to five local law firms. In addition, Shell's in-house lawyers still have the freedom to go 'off panel' and write pitches for specific assignments.

Canada-based associate general counsel Gordon McCue led the six-month panel review, advised by pricing analyst Vincent Cordo (incidentally from selected firm Reed Smith), appointed last year. "The goal of the new panel is to align our interests better with our law firms and put in place a partnership with them that adds value both ways," McCue said of the goal of the latest panel review.

A global presence was one of the requirements, as was the willingness to offer Alternative Fee Arrangements (AFAs), also described by legal director Donny Ching as "appropriate fee arrangements". Furthermore, the way in which offices deal with data privacy and cybersecurity played an important role in the choice of preferred advisers, as did the availability of "advice hotlines" for short questions without immediately running the counter.

McCue then asked Shell's in-house team to bring everyone's experiences with the various legal partners to the table, plus data on how often they were called upon at all. After this, it was the turn of law firms to pitch through an online auction, with those willing to offer AFAs a definite advantage.

For some time now, Shell has been hiring legal services exclusively with the help of AFAs, which is no harm for the oil company. The company reportedly spent 20% less on external legal fees in 2014 than the year before. Last year, price analyst Vincent Cordo was appointed, who was given the mission to reduce legal costs by nine million euros per year.