Council spending on external legal advice falls 10% in single year

Spending on law firms and barristers by local authorities in the UK fell by 10% to £156m in 2013/14, research by Thomson Reuters has suggested.

The reduction came after three years of consecutive growth, with councils spending £174m in 2012/13, £164m in 2011/12 and £157m in 2010/11. Spending on external legal services was, however, marginally higher than in 2009/10, when councils spent £152m.

Thomson Reuters noted that many councils had undertaken projects to reduce their spend on external legal services, including consolidating their panels of law firms, sharing in-house legal teams between local authorities, up-skilling their in-house teams and supporting them by investing in technology, such as automated document assembly.

It also highlighted how some councils had restructured their legal departments and invested in developing in-house expertise to enable them to take on legal work for other clients, “with the aim of reducing their overall legal spend, or even making legal departments cost-neutral”.

The research also showed that:

• The average local authority spent £360,000 on external legal advice in 2013/14;
• Unitary authorities spent an average of £561,000;
• London boroughs spent an average of £753,000.

Desmond Brady, Head of Government at Thomson Reuters, said: “Local authorities are reluctant to impose cuts on front-line services, which is why legal support is being targeted to create efficiencies. These figures show that some of them are finding success.

“More and more councils have even started to look beyond the traditional approach of in-house legal teams supplemented by a panel of firms, towards models where legal services need not be a major cost.

“As more….shared legal partnerships and joint ventures come onstream and reach maturity, they will be closely watched to see which models are most successful in helping local authorities to reduce costs.”