If there is one person that should appreciate the role of outside lawyers in banking mergers, it is Robert Moore.

Mr. Moore spent 15 years as outside legal counsel for Union Planters Corp. before being named president of the Memphis-based banking company.

Once he put on banker's pinstripes, he quickly focused on lawyers from the perspective of the bottom line.

"You view them as an expense and as a valuable resource," said Mr. Moore. "But there is a fine line between the two."

While he is not alone in his view of outside legal expenses, few banks have been as aggressive as Union Planters in limiting the role - and the cost - of outside counsel in mergers.

The Tennessee bank has nearly doubled its asset base to $10.2 billion in recent years with very little outside advice. Indeed, Mr. Moore's legal department took care of nearly all the work while the bank spent more than $400 million in shareholder money to grow the franchise.

Others seem to be watching. Increasingly, banks seem to be moving away from the practice of hiring outside experts on flat-fee arrangements.

Indeed, many banks are farming out only the most specialized work and adding specialists to their general legal counsel's staff to handle most merger and acquisition work.

"When you need a Rolls Royce, you need to go rent one," said Mr. Moore. "But 90% of the time a good Ford will get you where you are going."

Top merger and acquisition lawyers say that they don't see an industrywide trend, and point out that there is no lack of work. "We never find ourselves waiting for the phone to ring," said a Wall Street deal lawyer. "We recognize that some banks want to handle more of the transaction, but there is still a role for us."

Indeed, data compiled by SNL Securities show that a small percentage of all deals in the last 18 months were completed with in-house legal counsel. But the numbers also show a growing number of acquirers completing at least one transaction without outside lawyers.

In any event, the trend toward in-house advice is largely hidden since many banks still give credit in the rankings to the outside counsel even when they performed only specialized functions.

For instance, NationsBank Corp., Charlotte, N.C., uses outside counsel for specialized tasks or when intensive staffing is needed. "Sometimes there is a lot on our plate and we bring in outside counsel," said Charles Berger, associate general counsel who oversees mergers for the nation's fourth-largest bank.

When the company purchased Chrysler's consumer finance operation, it farmed out legal work to a North Carolina firm whose sole function was to handle local licenses of the new affiliate in numerous states. "It didn't make sense to tie my people up with that," Mr. Berger said.

Bankers say tax opinions and guidance on employee benefits issues are contracted out, but they are mixed on whether outside law firms still play a role in general advisory work or as a rainmaker. "We use outside lawyers when they bring something to the deal, but I can't remember the last time one brought us a deal we weren't already working on," said a regional bank general counsel who asked not to be identified.

But Michael Shepherd disagrees. Formerly a partner at New York's Sullivan & Cromwell, he has been general counsel at Shawmut National Corp., Hartford, Conn., during 11 acquisitions.

Despite the volume of deals, Mr. Shepherd decided not to beef up his staff, instead using top-ranked outside law firms to handle much of the legal work.

"Even high-priced firms can do the work cost effectively when they handle several deals for you," he said.

Still, his role illustrates one of the leading reasons that banks like in-house counsel. Executives say that a heavily involved general counsel can move a deal to completion quicker.

"Five years ago, you would sign a definitive agreement and then the outside counsel would take control. Then Union Planters would not be involved again until the closing, which could be a year away," said Mr. Moore. "Today it can take as little as 120 days, and everyone has to be able to move quicker, and the general counsel can do that because he is an insider.

Others agree.

"We can get decisions made quicker internally than an outside attorney because we understand the bank's objectives and work just down the hall from the people who make the final decision," said NationsBank's Mr. Berger. "Time is money."

Adds Patty Meringer, vice president and associate counsel at New Orleans-based Hibernia National Corp., "With an outside counsel, they could have five or six transactions going at once. I don't have any other client. When there is a transaction, it is the most important thing to me."

At Hibernia, the bottom line result has been a cost of about $5,000 in outside legal fees on a plain-vanilla transaction that otherwise could have cost 20 times as much. And even though the bank has completed eight transactions in the past 18 months without outside lawyers, executives say they haven't beefed up internally.

Hibernia has an in-house legal staff of three with no specialists.

"We don't believe in consultants or expensive external help," said Ron Samford, executive vice president and controller of Hibernia. "But we also don't believe in adding to staff either."

On the other hand, Norwest Corp. has built up a staff of legal specialists. The Minneapolis-based superregional is one of the most active acquirers, but has not used outside legal advice - or investment bankers - for more than a decade. During the 18-month period surveyed by SNL Securities, Norwest reported 19 deals valued at $1.037 billion - none of which involved legal counsel.

The do-it-yourself philosophy is in keeping with how the bank approaches everything. The company has as many as four people dedicated to merger work, with another three to four specializing in regulatory matters. "Our philosophy is that if there is enough to keep a person busy full time, it makes sense to hire someone," said Stan Stroup, executive vice president and general counsel at Norwest. "At a company like ours, mergers and acquisitions is almost a line of business."

Few banks are likely to make acquisitions on the scale of Norwest, but experts predict that the consolidation of banks and thrifts will only accelerate the growing role of in-house counsel. "As banks get larger and the industry consolidates, you are going to get more players where the use of in-house expertise is more economically viable," said Steve Johnson, a partner at Lindquist & Vennum, a Minneapolis-based law firm that mostly advises sellers. "I think you will see more emphasis on cost-savings."

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