A panade is a mixture of bread and liquid, in this case dry breadcrumbs and milk. It helps to keep the meat tender and prevents the meatballs from shrinking too much. Traditionally a panade is mixed in advance and then added to the meat mixture, and you are welcome to do that here if it helps you combine the meatballs throughly without overmixing. If you're confident in your gentle but thorough mixing technique, it's not necessary to prepare the panade in advance. (Alternatively, you may be thinking of the rustic French casserole called panade that also mixes stale bread and liquid.)