The Royal Bank of Scotland (RBS), revisiting its coveted roster of preferred firms, designed a fast track. If an invited firm agrees quickly to the terms of the new agreement, which extends for three years and emphasizes fixed fees and rate reductions, they gain a spot as preferred counsel. Corp. Counsel, Vol. 16, Nov. 2009 at 61, explains that the expedited procedure “is believed to offer firms preferential treatment in return for early agreement on pricing terms.”
Here’s the zinger: “As part of this cost-cutting drive, RBS has asked applicants to drop fee levels by 10 percent from those set during the [previous] 2006 review.” Now, it may be that in 2006 rate levels were set for the entire period and were higher than 2006 rates but less than the expected increases. Even so, a roll-back by 10 percent of rates negotiated three years ago sounds drastic. If rates would have otherwise risen 3-4 percent a year, this aggressive cut means something like a five-year freeze (nothing for 2010, 2011, or 2012 and a 10% discount off already-lower-than-normal prevailing rates).