Monday 26 February 2018

AIB legal revamp could leave 150 small law firms out in the cold

The bank has traditionally employed 200 local firms
The bank has traditionally employed 200 local firms
Peter Flanagan

Peter Flanagan

AIB has slashed the number of law firms it uses in a move that could have dire consequences for small practices across the country.

The bank has traditionally employed around 200 local firms around the country to deal with run-of-the-mill issues regarding its branches or local customers.

Many of those firms, often as small as two or three people, have come to rely on their retainer from the bank for making future forecasts for their business, and it had come to be an essential part of a firm's business plan.

Now however, an internal revamp of the bank's procurement practices means the lender will centralise much of its legal business and focus on a much smaller number of firms, possibly as few as 50.

Several law practices across the country are known to be up in arms about the changes, but the bank is unlikely to reverse its position on any of the changes.

At least one firm that had been used by AIB for as long as a decade has been cut loose, and other practices that lost out are thought to have been working with the bank for even longer.

AIB declined to comment on the changes.

The main banks use one of the major Dublin practices for big ticket items, but routinely utilise local firms around the country when dealing with relatively minor issues.

This has been standard practice across the financial sector for decades, but while they are convenient to use, the aggregate cost is believed to be more than if the lenders relied on a small number of partners for their work. AIB is in the middle of huge cost-cutting schemes as it seeks to desperately reduce costs across its business.

It is in the process of laying off some 2,500 staff, but it is also dialling back on smaller perks for staff, including the removal of canteens in some branches and replacing them with microwave and refrigeration facilities instead.

In another sign of how severe the cost-cutting drive is, elsewhere in the bank, many staff are now being asked to sign for stationery they need for their day to day work.

Where previously items such as pens and notepads were stored in a press on every floor, they are now being centralised into one part of the bank's office.

Indo Business

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business