In 2001, Merrill Lynch used more than 1,000 law firms worldwide. By 2005, the law department had whittled that number down to fewer than 200 (one fifth or fewer in about four years!). Its top 20 firms today account for more than half its business. [See my posts of July 16, 2005 including convergence as one of three most common techniques, March 24, 2005 on concentration rather than convergence, March 29, 2005 and blended rate consequences of convergence, April 18, 2005 on the pressure to use larger firms.]
According to an interview of Rosemary Berkery, Merrill’s general counsel (Financial Times (May 5, 2005 at 9), the new agreements with firms, “promising more work in return for ‘better economics,’” saved Merrill in 2004 more than $16 million. That saving may be on an outside counsel spend of well over $100 million, but $16 here and $16 there and soon you’re talking ….