Deutsche Bank's proposed junior lawyer 'pay block' could become a trend, warn in-house lawyers

Deutsche Bank has raised eyebrows with its announcement that it will no longer pay law firms for hours put in by junior lawyers.

Philip Lange

Last week, it was revealed that the financial heavyweight plans to no longer pay City law firms for work carried out by trainee and newly qualified lawyers. The controversial tender condition has been put to law firms as the bank nears the end of its biannual global panel review. While the practice of only paying outside counsel for work carried out by more senior staff is relatively unheard of in Europe, it is somewhat more common in the United States. A study undertaken by the Association of Corporate Counsel in 2011 found that 20 per cent of the 366 in-house leaders surveyed had at some point refused to pay outside counsel for work carried out by juniors.

An emerging trend

The move has understandably ruffled feathers among City partners, but has also been met with a tepid response from Deutsche Bank’s in-house contemporaries. A survey conducted by industry publication Legal Week found that only 34 per cent of in-house lawyers approve of Deutsche Bank’s new cost-cutting strategy, while 17 per cent were undecided about the move and almost half (49 per cent) felt it was a bad idea. Despite their reservations, almost all (94 per cent) of the 200 in-house lawyers surveyed by Legal Week said they believed it possible that more departments in the UK and Europe will begin adopting the practice. Sources: Legal Week; Corporate Counsel; Legal Cheek

Email your news and story ideas to: [email protected]