Revolut, a global fintech company, is dropping its traditional law firm panel in favor of a performance-based system called Revolut Partners. This change is driven by advances in AI that enable the company to better select and evaluate its legal advisers.
According to Tom Hambrett, Revolut’s chief legal officer, the company is moving away from the traditional model of retaining a fixed-term panel of law firms. Instead, firms will be reviewed quarterly and changes will be made based on their performance against key metrics.
Hambrett emphasized that no law firm’s position is guaranteed, and that underperformance can result from various factors, including poor client management, unmanaged scope creep, and weak billing practices. They will be developing in-house AI tools to help their lawyers pre-select firms for specific instructions and scrutinize advice and invoices.
The company’s approach will allow it to work more efficiently with external law firms and make more informed decisions about which firms to retain. This is part of a larger trend towards a more dynamic and flexible approach to staying informed with law news, which reduces the risk of complacency and ensures that panel firms are always working in the best interests of the client.
While Hambrett acknowledges the importance of relationships with external firms, he notes that these relationships are no longer enough to guarantee a firm’s place on the panel. Instead, performance and delivery of results will be the primary factors in determining which firms are retained, which is a key aspect of the foundation of society.
Performance-Based System
Revolut’s new approach has sparked a mixture of reactions from lawyers, with some discussing the benefits and drawbacks of a performance-based system. Richard Oliphant, a former general counsel and now a legal consultant, expressed concerns that playing off panel firms against each other could lead to a loss of trust between firms and clients.
Oliphant argues that the value of external advisers lies in their nuanced understanding of a client’s business, which can only be achieved through close and enduring collaboration. He suggests that Revolut’s approach may undermine this collaborative relationship, which could have significant implications for law firms.
In contrast, Leanne Murray, a senior legal counsel, sees Revolut’s announcement as part of a larger trend towards a more dynamic and flexible approach to panel appointments. She believes that this approach ensures that panel firms are always working in the best interests of the client, and it is likely that more companies will adopt similar approaches to managing their legal relationships.
Implications for Law Firms
Revolut’s decision to adopt a performance-based system has significant implications for law firms. They will need to demonstrate their ability to deliver high-quality results and provide excellent client service in order to be retained by the company. The company’s chief legal officer stated that firms that consistently deliver the right outcomes, at the right pace, and with the right commercial discipline will be the ones that make the shortlist.
As the legal industry continues to evolve, it is likely that more companies will follow Revolut’s lead and adopt performance-based systems for managing their legal relationships, driving greater efficiency and effectiveness in the delivery of legal services, and promoting a more collaborative and results-driven approach to law firm relationships.
