In association with LocalGovernmentLawyer The Legal Department of the Future Are you fit for the future of public sector legal practice February 2016 www.localgovernmentlawyer.co.ukldotf See the results of our exclusive research More with much less How can legal departments cope with more work and fewer resources Roundtable Leading local government lawyers give their views on the way ahead Squaring the circle How technology can help Wise counsel What can local government lawyers learn from the success of their commercial counterparts Motivation techniques Keeping local government lawyers happy - read the results of our job satisfaction survey Recruiting the stars of the future Can local authority employers provide what local government lawyers want LocalGovernmentLawyer The Legal Department of the Future February 2016 3 Worst of times best of times There is a large council in the North of England which in its Revenue Budget for 201516 predicted that its Legal and Democratic Services would overspend by some 1.958m. It blamed the bulk of this overspend on staff agency costs and legal fees resulting from continuing increases in child protection cases. This may be an extreme example but it puts into sharp relief the pressures on many legal teams. Against this backdrop the Legal Department of the Future project was designed to examine the challenges that local authority departments face and to find out how the sector is responding. So how might the legal services sector look the next time we conduct this research You can read the results and analysis of the management and careers surveys throughout this publication but here are some predictions based on what we have learned The number of shared legal services whether fully integrated or loosely affiliated will have expanded further. The largest and most integrated shared legal services will be larger still. A handful will have joined Birminghams team in employing more than 150 legally- qualified staff and having a turnover of several million pounds. There will be more local authority-owned alternative business structures ABSs particularly if teams are required to use an ABS to deliver legal services to other public bodies outside their area. This is currently the view of the SRA but its interpretation is hotly disputed and it may take a trip to the courts to resolve. Some departments and not just the largest will see their commitment to deriving external income pay off. Others will falter as they struggle with the requisite investment not just in money to bring in clients and deliver the expected quality of service. Being price competitive is an advantage but not the only differentiator. The better-resourced departments will harness technology such as workflow management tools to deliver a more efficient service. Others will fail to make proper use of what is on offer. The experience and age profile of legal teams will have evolved bringing opportunities for more junior staff. The flipside will be that ambitious senior lawyers seeking to develop their careers within local government will continue to feel thwarted. Unless more senior non-management specialist roles can be created the loss of talent will continue and recruitment will become harder still. Many departments are already trying to adopt a range of innovative approaches in a bid to meet the challenges they face. Is your team one of them Philip Hoult is Editor of Local Government Lawyer and Public Law Today. Contents Bridging the gap p3 The Legal Department of the Future survey reveals that local government legal teams are employing a range of strategies as they face up to a challenging combination of increased workloads and severe pressure on resources. Philip Hoult reports. The way ahead p16 Our research highlights some serious challenges for legal departments their staff and clients. Local Government Lawyer convened a roundtable of leading legal services management to identify how some of these issues can be addressed. Derek Bedlow reports. A short guide to shared legal services p23 The LexisPSL Local Government team explain the background to and advantages and disadvantages of shared legal services in achieving improved cost efficiency within the public sector. Improving internal efficiency p26 The LexisPSL Local Government team provide a checklist for a continuous improvement model in the context of contemplating the delivery of shared legal services. Dancing with the devil p28 Tanya Corsie of IKEN Business explains why and how you should be using technology to improve your service. Lead or follow p30 The number of in-house counsel in the private sector has boomed as the general counsel role has grown in importance. Paul Cummins looks at the lessons for local government lawyers. Up for the challenge p32 With the local government sector under huge pressure legal departments are being tested to the limit. Helen Edwards of Kennedy Cater analyses how they are responding. Cant get no satisfaction p36 What effect have the cuts had on local government lawyers ambitions and morale Derek Bedlow outlines the results of our exclusive survey of more than 300 local government lawyers and assesses the implications for local authority legal teams. The shape of things to come p43 Derek Bedlow looks at how legal departments can organise recruit and retain their staff. Local Government Lawyer www.localgovernmentlawyer.co.uk Editor Philip Hoult philip.houltlocalgovernmentlawyer.co.uk Publisher Derek Bedlow derek.bedlowlocalgovernmentlawyer.co.uk Advertising Richard Worth richardlocalgovernmentlawyer.co.uk 01625 363 045 The Legal Department of the Future February 2016 LocalGovernmentLawyer4 What are the main challenges facing local government legal departments What strategies are heads of legal and their senior management teams employing in response Are departments being scaled back left as they are or even expanded What scope is there for further growth in the number of shared services And is the sale of legal services to other public bodies central to teams securing their long-term prosperity The Legal Department of the Future survey of 100 heads of legal sought to find answers to these and other important questions. As in the previous four editions of our research we asked respondents to identify their top three management challenges from a list of 14 criteria. You might be forgiven for expecting there to be little change from the 2012 survey after all the financial environment faced by councils has remained bleak and it is true that cost controlbudgetary issues are still considered the single biggest management challenge included by 69 of heads of legal in their top three. However after that it is all change. Constitutional and corporate governance issues were in second place in the last survey but have now fallen away. Heads of legal instead point to a lack of experience and resource in client departments as their second most significant challenge included by 36 of heads of legal in their top three. What this can mean in practice is that less experienced officers seek reassurance more frequently from the legal team before taking decisions adding to the departments workload. Or they fail to obtain legal input in situations when they should do leading to wrong decisions being taken and greater legal risk for the local authority. The third most significant challenge the difficulties in recruiting and retaining lawyers has also shot up the list included by 32 of heads of legal in their top three. This reflects the fact that three years ago the private sector was just coming out of the other side of the recession now it is buoyant particularly when it comes to recruiting in-demand areas of property planning and regeneration. For a discussion of careers issues including how local authority legal teams can compete in this environment see pages 36-45 and also the summary of Heads of legal point to a lack of experience and resource in client departments as their biggest challenge after budgetary issues. Less experienced officers seek reassurance more frequently from the legal team before taking decisions adding to the departments workload. Bridging the gap The Legal Department of the Future survey reveals that local government legal teams are employing a range of strategies as they face up to a challenging combination of increased workloads and severe pressure on resources. Philip Hoult reports. LocalGovernmentLawyer The Legal Department of the Future February 2016 5 our roundtable of heads of legal on pages 16-22 We went on to ask respondents whether demand for legal advice was set to grow fall or stay the same in the foreseeable future. Some 44 expect the overall volume of work to increase significantly i.e by 10 or more up from 37 in 2012. A further third 37 expect demand to increase slightly by 5-10 meaning that overall four in five heads of legal 81 expect an increased workload. As few as 5 of respondents predict a decrease. What are the reasons for this The survey suggests that there is no single factor at play but several. On the positive side there has been a return of regeneration projects and property work aimed at boosting economic growth in local communities. There has been an upturn in the economy and the council needs to become financially self-sufficient leading to more commercial projects says one head of legal. As you would expect with a growing economy there has been a rise in the number of planning applications leading to an increase in inquiries and Planning Court hearings. Heads of legal also point to the work generated by local authorities having to respond to their financial predicament. This has translated into restructurings service closures outsourcing shared services asset sales and a greater interest in income generation. A number of respondents highlight the intention of their authorities to become commissioners of services rather than direct providers. Then you have to throw into the mix factors affecting individual practice areas such as childrens and adult social services. The Care Act 2014 and the Supreme Court ruling in the Cheshire West case on deprivations of liberty both genuinely landmark developments are still being felt by all those authorities with responsibility for adult care. In childrens services reforms aimed at ensuring that the majority of care proceedings complete within a 26-week period have had the effect of front-loading legal work. The number of care applications received by Cafcass has continued to rise relentlessly with the total for the first half of 201516 pointing towards yet another record year. Levels of litigation remain high as well particularly in relation to judicial review proceedings as claimants seek to challenge the implementation of cuts to services. A number of local authorities have faced legal actions as they seek to shake up their provision of library services for example. So what can legal teams and those responsible for managing them do to tackle this conundrum We asked heads of legal about the following strategic options Changing legal department sizes and structures Getting the most out of the authoritys external legal spend Implementing shared services Setting up alternative business structures Generating extra revenue by selling legal services and Partnering with the private sector. Fig 1 LocalGovernmentLawyer The Legal Department of the Future February 2016 7 Going for growth Against a backdrop of further cuts to local authority budgets you might think that the vast majority of legal departments would be shrinking in size. But the survey found that almost exactly the same percentage of heads of legal 32 expect their teams to increase either slightly or significantly in size as expect them to stay more or less the same 35 or decrease slightly or significantly 31. Pursuing a growth agenda for a legal department at this time can be difficult however. One respondent notes that there is no political or management appetite for more lawyers in their authority and that lawyers are seen as blockers not enablers despite our best efforts. For others though the equation is simple more work undertaken in- house means more lawyers required. One head of legal cautions that extra posts will need to more than pay for themselves in extra income or saved external costs while another suggests that any growth in the number of lawyers will be for a fixed term to help the council deliver its agenda. Beyond that we are likely to have to bear the same level of cuts as other parts of the organisation they say. There is of course the previously mentioned challenge of filling posts in the most in-demand practice areas which heads of legal suggest are currently procurementcontracts planning property and child protection. How can legal departments compete with private sector firms in some of these areas for the best talent Pay rates available in local authorities mean we struggle to recruit in contractscommercial property teams acknowledges one head of legal. TCs in local authorities have stagnated in the recession and are now unappealing adds another. We need to do something to change this. The cutbacks to trainee posts during the recession are also said to have had a negative impact. Are fixed-term contracts which an increasing number of authorities appear to be offering part of the problem too particularly if there is no significant financial upside to compensate for the greater uncertainty One head of legal acknowledges that these deals are unpopular with candidates. This view is backed up by our experience of operating the Local Government Lawyer jobs board for the past six years where fixed-term vacancies attract significantly fewer views and applications than those offered on a permanent basis. In good shape The ability to reshape a legal department is a key part of the toolkit available to senior management whether the team is set to increase or reduce in size. In this respect more than a third of heads of legal 37 expect to use fewer locum solicitors and barristers going forward perhaps through the recruitment of additional permanent staff or the provision of extra capacity via shared service arrangements. This is almost double the number of respondents 19 who expect to use this pool of lawyers to a greater extent in the foreseeable future. Growth in staff numbers where it is happening meanwhile looks set to be at junior levels. Almost half of heads of legal 48 say they expect their numbers of paralegals to grow compared to 19 who expect them to fall. Similarly 32 predict that their cohort of assistant solicitors will increase while 23 believe they will fall. Reasons given for this include the attraction of growing your own improvements in technology and the increased use of workflows and standardisation to allow more transactional work to be carried out at a more junior level. The position is reversed however when it comes to senior solicitors with 19 of heads of legal expecting numbers to grow and 28 expecting them to fall. The situation is starker still at principal solicitorteam leader level where just 9 of heads of legal expect a growth in numbers and one in four 25 expect a reduction. In time this could present serious management challenges if there are limited opportunities for the junior lawyers to progress their careers. Controlling external spend A recurring theme ever since we started our research almost a decade ago has been the importance of controlling expenditure on external legal advice. Significantly the latest survey reveals that in many cases the relevant budget is not held by the legal team but rather by the client department which has to fund provision where the need is identified. This does beg the question of how much control is being exerted and whether full value is being extracted one head of legal admits that their council is yet to identify all external legal spend as some goes through the client direct. Fewer than one in ten of heads of legal 8 expect their budget for external advice to increase by more than 5 in the foreseeable future while more than half 54 expect it to fall by more than 5. We are looking to put work out only when there is a capability issue not a capacity issue says one respondent. More work undertaken in- house means more lawyers are required extra posts will need to more than pay for themselves in extra income or saved external costs. Fig 2 The Legal Department of the Future February 2016 LocalGovernmentLawyer8 Things will take longer but that is the price of reducing costs. Others point to the desire to develop in-house expertise as a key driver. More than half of respondents 56 still believe the cost of routine external legal advice to be too high a finding common to previous editions of the research. For specialist and transactional work the figure is at 45 not much lower. In both cases just 2 of heads of legal consider the fees to be good value. These figures show no improvement on the 2013 survey if anything they reveal a hardening of attitudes despite the fact that panels of law firms and to a lesser extent barristers have been such a significant feature of the market for many years. Almost three-quarters 74 of respondent authorities are part of a panel or framework arrangement for law firms and a further 6 are planning to join one. For barristers 54 of authorities use a panel or framework with a further 12 planning to do so. Fifty-eight per cent of authorities say that they have saved money on solicitors fees by using a panel or framework 24 say they have reduced fees by 20 or more. There could be further concerted pushes towards extracting lower rates or better value when these framework agreements are re-tendered but what would the impact be on external providers if this were to happen Some high-profile names in the sector are already noticeably absent out of choice when the results of legal services procurements are announced although they are still considered to maintain a strong presence for top-end pieces of work. Further pressure on rates could see other law firms commitment to the sector called into question particularly at those practices where the hourly rate for public sector partners is already significantly lower than the rate for those who generate their revenues from private sector clients. When it comes to barristers meanwhile the success of panelsframework agreements has been mixed. In December 2015 the London Boroughs Legal Alliance unveiled a revised four-year framework agreement worth 25m reducing the number of chambers chosen from 29 to 19 in the process. However in August 2013 the North West Legal Consortium decided against continuing with its framework agreement for counsel and chose instead to establish a database of barristers rates. In our latest survey one respondent reports that their department has access to an arrangement in relation to barristers but adds that it doesnt really work and has not saved money for some areas. Another finds that their arrangements are no better than mates rates at preferred chambers the latter saving the hassle of procurement. Against that 65 of those respondents that use barristers panels say that they have reduced costs. The unstoppable rise of the shared legal service The third strategic option for local authority legal departments we asked about was setting up a shared service or joining an existing one. This years survey reveals that more than a quarter of legal teams 26 are already part of such an arrangement while the same percentage are actively considering joining or forming one. The three main reasons given by heads of legal for being part of or contemplating a shared service are the desire for internal efficiency and productivity gains financial pressures on the legal department and the need to build resilience. All three were to be found and the need to meet a 245000 savings target for legal services was assigned particular importance in a recent report prepared for Central Bedfordshire Councils Executive ahead of its decision in December 2015 to name LGSS Law as its preferred bidder for implementing a shared service. The financial advantages were also cited by Wychavon and Malvern Hills Councils for their decision to set up a shared legal service from the beginning of January this year. One intriguing question is whether once a shared legal service has been established there is an intrinsic impulse for it to grow in size and scope. HB Public Law for example has moved well beyond its origins as a shared service between the London boroughs of Harrow and Barnet to encompass providing all legal services for Hounslow and Aylesbury Vale councils. Prior to its deal with Central Bedfordshire LGSS Law started out as a service for Cambridgeshire and Northamptonshire County Councils before merging with Northampton Borough Councils legal department in 2013. The South London Legal Partnership has also grown from being a shared legal service for Richmond and Merton to include Sutton and Kingston and has been conducting due diligence with the London Borough of Wandsworth about a merger of their respective legal teams. These developments contrast with the shared service for Manchester City Council and Salford Council which has thus far stuck resolutely to its management teams position that there would be no further growth beyond its launch in April 2012. When it comes to shared legal services there is of course a vast array of models Fig 3 Fig 4 Fig 4 LocalGovernmentLawyer The Legal Department of the Future February 2016 9 that can be adopted. The proposed Orbis Public Law partnership under consideration by Surrey East Sussex West Sussex Brighton Hove Councils and an unnamed district appears to be a looser affiliation with the lawyers in each team continuing to be employed by their original authority. There are a number of other collaborative arrangements limited to initiatives such as joint training and the procurement of solicitors and legal publishing. Despite the inherent flexibility of shared service arrangements nearly half of heads of legal 48 say this option is not presently being considered. The three most commonly given reasons for this are that demand for legal advice can be met within the present structure members and senior officers want to retain an independent legal function and a shared service would lead to a disconnection between the legal team and internal client departments. Making the business case The survey reveals that a number of putative shared services have clearly foundered at the business case stage. We have been through this and demonstrated that the service would not be as good and would probably be more expensive says one respondent. Another points to a lack of any real evidence of shared services delivering savings which are not achievable through simpler means. The shared service model would not deliver real sustainable savings adds a third although they add that it needs something more aggressive real change rather than rearranging the deckchairs. Other heads of legal report that the idea was actively pursued around 201011 but there had been no appetite at the time Fig 5 Fig 6 The Legal Department of the Future February 2016 LocalGovernmentLawyer10 from neighbouring authorities. Whether that would still be the case now if the process were gone through again is an interesting question. For some the potential for a shared legal service has suffered because it evokes issues over the countydistrict divide whether current or historic. Another challenge highlighted by some respondents arises where potential partner authorities have different political persuasions though this issue did not prevent the establishment of HB Public Law out of the legal teams at Harrow traditionally a Labour council and Barnet Conservative. In Wales the continued uncertainty about local government re-organisation the Welsh Government initially proposed reducing the number of councils from 22 to eight or nine has led to the adoption of a wait and see approach reports one respondent. The survey meanwhile found that a significant minority of rank and file lawyers also remain to be convinced that shared services are right for them. Some 28 say they would be less likely to apply for a job in one with fewer than one in ten 7 suggesting that they would be more likely to apply. The main perceived disadvantage of working in a shared service is seen to be location the prospect of having to move to a less attractive working environment. This was followed by a more distant relationship with clients and the home authority pay and manageability of the workload. The pluses by contrast were seen to be the potential offer of good quality varied work and the training and career development opportunities. Pursuing alternatives The fourth and fifth strategic options covered by the survey setting up an alternative business structure ABS and selling legal services to other public bodies are worth considering together for reasons that will become clear. Interest in ABSs at the time of the 2013 survey was considerable but so far only HB Public Law Buckinghamshire Law Plus and LGSS Law have obtained licences from the Solicitors Regulation Authority although Essexs Cabinet recently approved Essex Legal Services plans to apply for one. In this survey just 4 of respondents say their departments have set up an ABS or are about to apply or in the process of applying to the SRA. A further 21 say it is under serious consideration while 25 may look at it in the medium term. The comment of one head of legal that he would prefer to see how successful others are first is a common response. More than half of those surveyed 54 reject the idea. Is it simply the latest fad asks one respondent while another describes it as flavour of the month and says they do not consider it presently to put us in a more favourable position from a business point of view. Another suggests that for a small team it has no benefit at this time. Interest in ABSs may well have been stirred however by recent comments from a senior SRA official to the effect that in the regulators view local authorities selling legal services to other public bodies beyond their immediate area are required by the Legal Services Act 2007 to do so through an authorised entity. Local authorities are not authorised entities so their legal teams would according to the SRA have to set up an ABS if they want to trade further afield. These comments came as something of a bolt from the blue to those authorities which have hitherto relied on Rule 4.15 of the SRA Handbook and empowerment statutes such as the Local Authorities Goods and Services Act 1970 to trade more widely. Fig 7 The Legal Department of the Future February 2016 LocalGovernmentLawyer12 At the heart of the issue is whether client public bodies of local government legal departments should be considered members of the public or a section of the public for the purposes of section 154 of the Legal Services Act 2007. Although this issue is ultimately one for the courts to determine the SRA takes the view that such bodies could be considered in this way. In response Geoff Wild Director of Governance and Law at Kent County Council has highlighted an opinion to the contrary obtained from leading local government law QC James Goudie of 11KBW in 2013. In January The Lawyers in Local Government Group also sought legal advice on the validity of the SRAs view. See the Management section of Local Government Lawyer for the full background Trading up Putting the resolution of this regulatory issue to one side legal services are undoubtedly seen as one of the prime opportunities for local authorities looking to generate additional income streams. In the Legal Department of the Future survey some 60 of heads of legal say their teams either sell or have definite plans to sell services to other organisations while 23 say it is presently under consideration. Fewer than one in five councils 17 rule it out one respondent reports a lack of capacity due to a downsized department and another says it is difficult to justify when we can struggle to meet internal demand with a limited legal resource. There is clear recognition amongst heads of legal however that selling legal services to other public bodies is not without its difficulties. The top five challenges are perceived to be Insufficient resources to take on the additional work 75 of heads of legal consider this is a key challenge Prioritisation issues and conflicts of interest within their own authority 48 A lack of sales and marketing experience 43 The cost of regulation and indemnity insurance 38 and A lack of internal infrastructure 32. Interestingly the challenge of there being a lack of demand is only in sixth position suggesting fairly widespread confidence that there is a market out there. But as one respondent notes If everyone is trying to set up sell services who is going to buy Hitting the target So who are these potential clients Well those currently selling legal services are principally selling to maintained schools 78 academies and free schools 71 and other local authorities 67. These were followed by charities and not-for- profit organisations 35 housing associations and ALMOs 33 parish and town councils 31 police and crime commissioners 18 and blue light services 18. Recently-established organisations such as combined authorities are also a source of work for some teams 14. Many legal departments would very much like to cast the net more widely however. Some 43 of respondents intend to sell legal services to universities but only 2 currently do so. Similarly 51 plan to sell to clinical commissioning groups 46 to health trusts and 39 to other NHS bodies but again very few currently do so. Other target clients include housing associations 63 of trading local authorities intend to sell to them but only 33 do so now and staff- owned public sector spinouts 40 intend to sell to these bodies following the client but just 8 currently do so. It would be nave though to ignore the challenges in securing new clients and then keeping hold of them. Arguably the easiest sell is to other local authorities and in this regard the survey provides some good news. Two in five local authorities 41 have bought legal services from another authority a further 36 have not but would seriously consider doing so. The attraction says one respondent is to keep public money in the public sector. LocalGovernmentLawyer The Legal Department of the Future February 2016 13 In many cases the instructions from other local authorities appear to be ad hoc rather than a steady steam arising where the buying council has capacity or resilience issues sickness or holiday cover faces a conflict of interest for example in a serious case review or requires specific expertise more likely to be available from another legal department than from private practice. According to heads of legal the main perceived attraction of using another local authority is the lower cost although some suggest that it is still cheaper to use a locum lawyer. This is followed by a better understanding of the culture of local authorities more relevant experience than private practice and familiarity with working practices and procedures. What clients want But what services do local authority clients actually want to buy The areas where respondents say they would be most likely to use local authority providers are employment matters 50 litigation and enforcement 42 procurement and contracts 38 property and asset management 38 planning 27 adult social services 27 and child protection 27. This differs from the five areas where heads of legal say their departments would be most likely to use private practice in future namely regeneration and economic development 57 PFIPPP and projects 51 procurement and contracts 49 judicial review 39 employment 37 and property and asset management 37. Local authorities do as buyers have potential concerns about instructing another council legal team. Chief amongst these is the potential slow turnaround of matters due to the provider prioritising its own authoritys work 81 of heads of legal included this in their top three concerns. Other causes for worry are the potential for there to be a permanent loss of future work to a rival authority 43 a lack of experience of advising a range of authorities with different procedures and cultures 35 a lack of the necessary expertise 34 and a lack of infrastructureclient care facilities at local authority providers 33. These results should provide plenty of food thought for those legal departments seeking to increase their income generation. The comments of some heads of legal emphasise just how important it is to get it right first time. I would be reluctant to purchase again because of client care issues and the quality of advice says one while another reports that we did have a bad experience which put us off one provider and a third suggests that the quality was very poor and they would not look to repeat. By contrast another respondent says they obtained external employment advice where there was a conflict of interest and reports that it was cheaper than our service and excellent. In designing their offerings local authority legal teams will have to examine how they can deliver this kind of positive experience. On a positive note rank-and-file lawyers seem pretty open-minded about the prospect of being asked to trade legal services. Nearly two thirds of the 300 lawyers who responded to our careers survey agreed with the statement that it was an opportunity for me to acquire new experience and skills. Fewer than one in four agreed with the statement that it was a risk to the public service ethos. It is worth highlighting how a number of local authority legal departments have already enjoyed success in securing places on legal services framework agreements or winning individual contracts. Last year saw Norfolk-based shared service nplaw win a 100000 contract to advise Maldon The Legal Department of the Future February 2016 LocalGovernmentLawyer14 District Council in Essex on section 106 agreements seeing off 18 rival bidders in the process. Staffordshire County Council and Conwy County Borough Council also secured positions on various lots on panels set up by the National Procurement Service for Wales. And in December 2015 three legal teams Kent Legal Services Staffordshire and nplaw won places on the revised 30-90m legal services panels set up by HealthTrust Europe a purchasing body for the health sector that provides support to more than 400 public and private sector organisations. Of course these successes come with the proviso that as any private sector firm will tell you being appointed to a panel is no guarantee of a steady flow of work. But they are at the very least a start. Private sector partners The final strategic option for legal departments that respondents were asked about was entry into a partnership or joint venture with a private sector provider. Just 11 say they are considering such an arrangement the same percentage as in the 2013 survey. So far there have only been a handful of such deals. The tie-up between Bevan Brittan and HB Public Law is a high-profile example but elsewhere developments appear to have stalled. Sandwell Metropolitan Borough Council appointed Ashfords as its sole legal provider on a three-year deal in October 2012 but this arrangement was not renewed when the term came to an end last autumn despite internal council papers suggesting it had been a success. Kent County Council had meanwhile hoped to have a partner in place for a ten- year 100m joint venture with Kent Legal Services for a contract start date of 1 April last year. The procurement exercise was hit by delays with a decision on the single remaining bidders proposal subsequently scheduled for September 2015. However this decision was not taken. A spokesperson for the county council suggested that a Cabinet decision on the procurement would be taken later in the autumn of 2015 but this timeframe again passed without any further developments at least publicly. Interestingly the option of a direct partnership with a private sector firm was considered by Central Bedfordshire and discussions were held with three leading practices but this approach was rejected on the basis that it is highly unlikely to make any savings and in all probability would prove more expensive. Seizing the day Taking the results of the Legal Department of the Future survey as a whole it would seem that there is no consensus yet on how local authority legal departments should respond to the financial pressures they are under. The survey reveals there is still a wide range of often strongly-held opinions on the merits of strategies such as shared services alternative business structures trading and framework agreements. However it does appear that some departments have significantly more control over their destiny than others. Which side is your team on Philip Hoult is Editor of Local Government Lawyer and Public Law Today. About the surveys Two surveys were conducted between July and November 2015. The first surveyed heads of legal at local authorities in England and Wales on the management issues they face and their plans for the future. 100 heads of legal took part. The average department size was 26 and the breakdown by type of authority is as follows First tier authority 17 Second tier authority 34 Unitary authority 26 London borough 14 Metropolitan authority 9 The second survey on careers and job satisfaction issues was conducted amongst the local authority lawyers that subscribe to the Local Government Lawyer newsletter. 312 lawyers took part in the survey. The results of both were compared with previous management and careers surveys conducted in 2012 and 2013 respectively. LocalGovernmentLawyer The Legal Department of the Future February 2016 15 Local Authority Traded Legal Services Directory eastlaw is an award- winning legal practice hosted within North Norfolk District Council. We take a different approach to legal services combining the best aspects of public sector practice with the efficiency and dynamism of the private sector. We are committed to providing a value for money specialist legal service which is efficient effective and highly regarded striving to meet need and client expectation. We provide effective and pragmatic advice to our clients across issues affecting the public sector. www.publiclawtoday.co.ukdirectory395-eastlaw LGSS Law Ltd is a Local Authority law firm specialising in the Public Sector. In April 2015 LGSS Law was converted to LGSS Law Ltd under an Alternative Business Structure. We are a well-regarded innovative team of highly experienced legal professionals. We provide cost-effective legal advice and assistance to a range of public and not-for-profit sector clients. We pride ourselves on our client-focused approach as well as our ability to understand and comprehend the way in which our clients work. We are fully committed to providing you with quality legal advice and assistance that aims to support you to achieve your goals. www.publiclawtoday.co.ukdirectory401-lgss-law Bristol Legal is a highly regarded innovative team of in-house lawyers providing cost effective legal advice to a range of public sector and not-for-profit sector clients. We provide legal support in procurement and contracting conveyancing and commercial property work employment child protection and health and social care. Our lawyers deliver cost effective robust and high quality legal support and advocacy to our clients. We are a large team with a wide range of specialisms and experience built to respond to the needs of our clients in challenging financial times. www.publiclawtoday.co.ukdirectory403-bristol-legal nplaw is a local authority shared legal service hosted by Norfolk County Council. We were established in October 2010 on the merger by our three original stakeholder clients Norfolk County Council Norwich City Council and Great Yarmouth Borough Council of their separate legal departments. The merger has been an outstanding success. With over 80 fee earners working in five teams nplaw has a strength and breadth of knowledge and experience that enables us to deliver high quality efficient and cost-effective services to our clients. www.publiclawtoday.co.ukdirectory404-nplaw-1 Lewes Legal Services is the in-house legal team of Eastbourne Borough Council and Lewes District Council. We provide access to market leading support and advice in relation to vires procurement state aid contractual and structuring issues for the delivery of public sector projects of all types. We are at the forefront of agile working practices - all our lawyers are enabled to work from anywhere and be contactable when you need them. www.publiclawtoday.co.ukdirectory405-lewes-legal-services As we know all too well in these austere times public service organisations have to work smarter and differently to try to maintain services whilst having to manage increased budget pressures. As a result we would like to offer to help save you some money on your external legal expenditure. Staffordshire Legal specialises in Education Employment Litigation Health Adult Social Care Pensions Property Development Planning Highways Contracts Childcare and Deputyships. 100 people ready to help you www.publiclawtoday.co.ukdirectory408-staffordshire-legal-services We are Oxford City Councils legal practice operating at the heart of historic Oxford. We provide the full range of legal services required by this busy and dynamic local authority. We are now offering our expertise to all local authorities and public bodies. Our practice has considerable local government and other public sector experience and understands the economic pressures and political sensitivities involved. We are acutely aware of the budget pressures facing the public sector and the need to demonstrate value for money. Our charging rates are competitive because we only operate in the public sector. www.publiclawtoday.co.ukdirectory411-oxford-legal-services As one of Essex County Councils flagship traded services ELS provides high quality cost effective legal advice to local authorities and other public bodies across the UK. ELS is a unique legal service combining exceptional commercial experience with a mature understanding of the values and ethos of the public sector. A team of more than 100 trusted professionals specialise in legal advice concerning Corporate Governance Children Adult Property Environment Projects and Dispute Resolution. www.publiclawtoday.co.ukdirectory412-essex-legal-services www.publiclawtodaydirectory The Legal Department of the Future February 2016 LocalGovernmentLawyer16 The Legal Department of the Future survey paints a picture of ever-rising demand for local authority legal services but static or diminishing resources being made available to deal with it. While according to Law Society figures the number of solicitors employed in local government in England and Wales has remain largely unchanged over the past five years compared with the drop of 21 in overall local government employment between 2010 and 2015 identified by the ONS demand for legal services is still outstripping supply. Moreover demand is expected to keep growing. Forty-four per cent of the 100 heads of legal that took part in the survey expected to see a significant increase more than 10 in legal work in the foreseeable future and a further 37 anticipated an increase of at least 5. Despite this only 34 of respondents expected to increase the number of lawyers they employ and close to the same proportion 31 expected the numbers of lawyers in their teams to shrink. At the same time the majority of respondents 54 expected the budget available for external legal services to shrink compared with just 8 that predicted a rise. The top concern unsurprisingly for heads of legal that took part in the survey was cost control included in the top three challenges by 69 of respondents and more than a quarter said that defending the department from cutbacks remained one of their key challenges five years on from the Comprehensive Spending Review that introduced the swingeing cuts that local government has endured. The Legal Department of the Future survey highlights some serious challenges for legal departments their staff and clients. Local Government Lawyer convened a roundtable of legal services leaders to identify how some of these issues can be addressed. Derek Bedlow reports. The way ahead Attendees Derek Bedlow Publisher Local Government Lawyer Tanya Corsie Director and Chief Operating Officer IKEN Jill Coule Head of Corporate Legal Services Sefton Borough Council Paul Cummins Head of Legal and Democratic Services Horsham District Council Paul Evans Assistant Director of Governance and Head of the South London Legal Partnership Helen Edwards Director and Head of Public Sector Team Kennedy Cater Doreen Forrester Brown Director of Law and Democracy London Borough of Southwark Philip Hoult Editor Local Government Lawyer Angela Hutchings Assistant Director - Law and Operations Essex Legal Services Anne Kingsley Professional Support Lawyer LexisNexis Andrew Kinsey Legal Services Manager Solihull Metropolitan Borough Council Victoria McNeill Head of Law Norfolk County Council Jayne Middleton-Albooye Head of Legal Services London Borough of Enfield Debra Norman Assistant Chief Executive Governance and Human resources London Borough of Islington Neil Smith Market Development Director Public Sector LexisNexis David Tatlow Director of Legal and Democratic Services Birmingham City Council Linda Walker Business Development Manager HB Public Law Elizabeth Warhurst Head of Legal Services and Monitoring Officer North West Leicestershire District Council. LocalGovernmentLawyer The Legal Department of the Future February 2016 17 As one delegate told the roundtable the traditional approach to the allocation of resources in local government is disadvantaging legal teams in the post- austerity environment Ive come to the conclusion that local government suffers now from budget management. Its done it for years and its worked very well but across all councils now the only thing you have is reduction. Managers are just confined by their budgets which they have to reduce usually by reducing staff and output. But we cant reduce output once weve taken the work on. We risk breaching our duties to the court and we risk our responsibilities to the SRA. Once weve taken work on we need to do it. So the key question for the delegates at the roundtable was this what can be done by local authority legal departments to square the circle of falling revenue and rising workloads Empowering the client Internally many authorities are working more closely with clients to forecast future workflows and to enable client departments to do more of it themselves reducing their reliance on the legal department. However the roundtable delegates generally agreed that there remains much to be done in this respect and that managing client demand is a growing problem as more senior members of staff have left or retired because of budget cuts. The growing lack of experience in client departments was identified as one of three biggest challenges by more than a third 36 of survey respondents. At Essex Legal Services Assistant Director Law and Operations Angela Hutchings detailed her departments comprehensive programme to empower clients to take decisions for themselves where possible. This consists of a number of initiatives including the production of articles how-to guides and FAQs by in- house lawyers providing training and legal surgeries within client departments and a phone a friend facility for clients. Where youre seeing senior officers in the business who are leaving or retiring and younger people coming through who dont have the same experience that corporate memory is being lost and so were trying to rebuild it. she said before adding that this not an overnight task. It is a lot of effort and it can feel like one- way traffic at times but it does eventually gain traction. You just have to stick with it she said. Delegates reported that empowering clients to take their own decisions is particularly difficult with child protection work. At Southwark Director of Law and Democracy Doreen Forrester-Brown said that her department had had some success in reducing the number of child protection cases from 120 a year to around 45 through helping to improve the governance regime within the Childrens Services team. She said A lot of that was around making sure that childrens services put in place proper governance networks. And we advise them what their structures might be in order for decisions to be made safely but also to be clear about where the risk is being managed. What weve found is that our work has changed from having lots and lots of cases in court to actually managing it through the Public Law Outline. Once its outside of the court process the departments are managing quite a lot of risk. So while you need to be careful it is about getting that governance right and pushing that responsibility back onto the clients. The knowledge gap Internal efficiency is also being driven by the adoption of legal technology although again there is still some distance to travel before the benefits are being fully realised across the local government legal sector. Paul Evans Assistant Director of Corporate Governance and head of the South London Legal Partnership the shared legal service of the London boroughs of Merton Kingston-upon- Thames Richmond-upon-Thames and Sutton estimated that councils across London could save more than 1m through moving to paperless working alone but progress in adopting the latest legal technology has not been helped by budget cutbacks and the more general slowdown in investment in authority-wide IT systems. Tanya Corsie Director and Chief Operating Officer at legal IT supplier Iken told the roundtable that the situation was changing rapidly in response to some of the needs identified by the survey. Ive found that increasingly people are trying to interact much more with their clients sharing workflows and enabling their clients to access self-service information so we have been doing a lot of work around client intranets and online communication. This can create issues around data security and ensuring that sensitive information is only shared with those that are authorised to see it but good systems will have safeguards built in. I think a lot of technology companies tend to consider local government conservative with regards to some of their technology needs but there is a real desire to work smarter now and its a really exciting time to be working with local government teams. The sector was also a late adopter of workflow management systems compared with private practice not least because some lawyers joined local government with the aim of avoiding time recording but this is changing rapidly as the need for legal departments to demonstrate their value through metrics has become increasingly important. We need data to back up our assertions not just our professional judgement if we are not just to be seen as a cost at a time when work is rising between 5 and 10 year-on- year said David Tatlow Director of Legal and Democratic Services at Birmingham City Council. What I have done is to identify the number of work types that weve got which at Birmingham is 180. We then give an indicative time a target for each one. As we know the volume of work for each of the 180 work types we multiply that If work continues to increase by 5-10 each year I can justify further recruitment but without the data it can be a real battle to persuade people that we need more resource. David Tatlow Birmingham City Council The Legal Department of the Future February 2016 LocalGovernmentLawyer18 volume by the indicative time that its going to take to complete that particular type of work. And you come up with a total number of hours that you need for the year. If you do that for all work types you have the total number of hours that you need for each time and for the whole of Legal Services. And if you divide that by the chargeable hours target you have per person somewhere around 1400 I need 160 staff. And if work continues to increase by 5-10 each year I can justify further recruitment but without the data it can be a real battle to persuade people that we need more resource. This kind of management information is also increasingly important for the efficient management of internal workflows to enable heads of legal to predict as far as possible where work is likely to arise and to be able to resource it efficiently. In doing so it was suggested legal departments might also be able to reverse the decline in status they have suffered in recent years. We need to be a lot smarter about this one delegate said. Rather than just providing everything we need to focus on doing the things that we can do really well and trying to ensure that the run-of-the-mill work can be done by the client or at an appropriate level. Thats what members and chief officers are looking for - good quality advice that helps them achieve what they want to do and that will enhance the role of the legal department. At Southwark a further internal solution to cost pressures is the development and recruitment of a number of specialist lawyers to the team in an effort to reduce its reliance on private practice in key areas and to enhance the visibility of the legal team in high-profile transactions. The council currently has two specialising in contracts and procurement and one in litigation with another planned for adult social care. Although the pay scales for specialist lawyers are similar to those of team leaders they do not have managerial responsibilities freeing them up to concentrate on their practice-focused roles. Again Forrester-Brown said while the creation of specialist roles required some tough negotiating with HR backed up by data derived from the automation of many of the departments processes and that creating specialist roles within existing local authority pay structures would continue to be challenging it is worth the effort. What is more the development of specialist practitioners also has the potential to address some of the career development issues identified by respondents to the Local Government Lawyer careers survey which threaten to undermine the drive for greater efficiency and quality within in-house teams. Budget cuts delayering and the growth of shared legal services mean that the number of management roles is diminishing with a potentially deleterious effect on morale and productivity. Weve been lucky that weve found people who dont want to be managers but are quite happy to do that specialist work Forrester-Brown told delegates. In terms of improving the reputation of the department and taking on areas of work that weve previously sent out theyve done some excellent work. Trading places To date the most visible way that many legal departments have responded to the squeeze on resources is by forming shared services arrangements. The survey found that 26 of respondents were already part of a shared service and the same proportion again were actively considering doing the same and the delegates agreed that the formation and expansion of shared services still has a long way to run. Love it or loathe it we are being pushed towards more working together and therefore size and strength will be an inevitability for all of us Victoria McNeill Head of Law at Norfolk County Council and the nplaw shared service. There was less consensus however on the future of externally traded legal services and whether selling legal services complements or clashes with the development of shared services operations. Being part of a shared service is not necessarily a prerequisite for external trading but the skills required to establish one are important to trading legal services successfully on any sort of scale. In particular being able to manage internal workflows properly is essential said Paul Evans of the South London Legal Partnership. We need to squeeze out every little bit of efficiency before we go on to charge others. Unless youre really on top of your game why is anyone going to buy it Moreover as Angela Hutchings at Essex pointed out you need to understand the data produced by your practice to understand what your costs are and where your potential advantages lie. You One of the strengths of local government is were not just a reprise of private practice. I think one of the traps that we are in danger of falling into is regarding our services as some kind of market where were competing for each others next meal. But what were really trying to do is keep public money in the public sector. Linda Walker HB Public Law Love it or loathe it we are being pushed towards more working together and therefore size and strength will be an inevitability for all of us. Victoria McNeill Norfolk County Council LocalGovernmentLawyer The Legal Department of the Future February 2016 19 need a USP she said. You cant just pile it high and sell it cheap. However while a shared service may provide some of the functional infrastructure to service external clients culturally and philosophically the two can come into conflict. There is a difference in the mindset between operating shared and traded services. In the former case legal teams provide their services to their clients at cost and have an interest in helping those clients to help themselves reducing their reliance on the legal team and reducing their legal costs. In a traded environment however the financial interest of the provider when working for external clients is the opposite to produce a margin on the cost of advice and to encourage the frequent use of its services by its clients. The ethos of public sector providers may not be so transparently commercial but it is a dichotomy that may be challenging for some. As one delegate said If youre going out to third parties you actually want a dependency culture there. You actually need people to want you to do more and you want people to call you at every little whim so you can charge and make profit. So how do you ally those two functions in your staffs heads when youre dealing with what seems to me to be very diverse and different ways of working. I think theres a tension there that could be difficult to resolve. Linda Walker Business Development Manager at HB Public Law the shared legal service for Harrow Barnet Hounslow and Aylesbury Vale which was amongst the first to establish an alternative business structure ABS told the meeting that helping internal clients and running a trading arm were not necessarily a contradiction in terms. Instead she argued growing the practice through trading enables it to reduce its internal clients costs without reducing the in-house team to a skeleton service. She said One of our targets is to reduce the dependency of internal clients on the legal service. Therefore we have got to grow further through external trading to maintain the range of services our clients need to support them. A further argument in favour of external trading is that it keeps resources within the public sector while reducing overall costs compared with using private practice. There can be win-win situations especially for other parts of the public sector said David Tatlow of Birmingham City Council. There is a very strong argument that the public sector will be using private practice and very probably private practice will be very good but even if you raise our prices quite a lot above cost we are still going to significantly undercut the costs that they are currently paying to the private sector. So we will save them money but we will also make income for the council. Nevertheless the growth of trading also raises the question of whether it will damage the collaborative nature of local government. One concern expressed about trading is that it has the potential to reduce co-operation and collaboration between local authorities if they consider themselves to be in competition with one another or if the client authority fears that the other is going to take over streams of work permanently. HBs Linda Walker thinks not I think one of the strengths of local government is were not just a reprise of private practice. I think one of the traps that we are in danger of falling into is regarding our services as some kind of market where were competing for each others next meal. But what were really trying to do is keep public money in the public sector. Others however do see the growth of trading in more Darwinian terms. When there is a gap in the quality and situation of some departments some providers will get bigger and better using technology to cut costs and getting the best lawyers and managers in said one delegate. You need to have a certain size to trade effectively at least 25 but more realistically 70 80 or 90 and then you can be a provider that can compete for large contracts. Winning work A more immediate concern for those with trading arms is how to win those contracts in the first place with a number of delegates experiencing some frustration in persuading other public bodies to use their services even where in some cases they have won a place on a framework agreement. As many law firms will attest getting onto a panel and getting work from it are two different things and as much marketing effort needs to be expended after being appointed to framework as before. Weve got to build relationships with our colleagues elsewhere in the public sector if we are to be successful said David Tatlow. We have to sell our culture and we should be proud of it. We operate wholly in the public interest and weve got to get that across to other colleagues elsewhere in the public sector where we want to provide services but at the end of the day that culture and our understanding of all the issues and problems within it give us something which the private sector cant equal. Marketing takes many forms but is in essence a combination of awareness raising and relationship building through advertising networking and providing training and seminars. Some have invested in new branding but the ongoing relationship building required presents a particular problem for local authority traded services as local government lawyers will usually have neither the experience nor resources to devote significant amounts of time to these activities. Yet without them efforts to build substantial trading activities are likely to fail. Youve got to invest in it because if you dont have the capacity to spend time on marketing or expansions youll get nowhere said HB Public Laws Linda Walker. Thats why I was recruited to Where youre seeing senior officers in the business who are leaving or retiring and younger people coming through who dont have the same experience the corporate memory is being lost and were trying to rebuild it. It is a lot of effort and it can feel like one-way traffic at times but it does eventually gain traction. You just have to stick with it. Angela Hutchings Essex Legal Services LocalGovernmentLawyer The Legal Department of the Future February 2016 21 look after these things so that everybody else could get on with their day jobs. We are seeing more and more organisations saying to us that theyd like to do these things but they dont have the capacity to grow. I say sometimes that yes its an additional cost but you just have to find the money and in time reap the rewards. Its invest to save basically. One initiative undertaken by HB Public Law has been to form a partnership with Bevan Brittan LLP in which HB Public Law can benefit from its marketing expertise and make joint pitches with the law firm at blended rates. There was clearly interest from the delegates in how trading authorities could learn from private practice yet concern that entering into partnerships could damage the public sector ethos and lead to some one-sided financial arrangements. One or two past experiences of partnering with private practice have not been good one firms idea of partnering on a 200000 contract was to pocket 180000 of it commented one but Linda Walker at HB Public Law is generally positive about the concept. For us the benefits are getting the expertise on marketing sharing of information and the capacity to spend time on marketing activities. We do get better service as clients as well because we know that we have that closer working relationship she said. ABS or not ABS The other question arising from trading is whether it is best conducted through an Alternative Business Structure ABS. At the time of the roundtable there was generally a wait and see approach to ABSs reflecting the survey which showed that only 4 have already applied or were in the processing of applying for ABS status with 21 seriously considering ABS status and 25 considering it in the medium term. Since the survey and roundtable however the Solicitors Regulation Authority SRA has announced its view that conducting reserved legal activities outside of their local area would require local authorities to set up an ABS so the context of the question has since changed. The obvious disadvantages of setting up an ABS are its cost and taxation status while the advantages include the flexibility to act for clients of all kinds and locations as well as freedom from public sector pay restraints if lawyers are employed directly by the ABS. For HB Public Law setting up an ABS was essential if the original councils Harrow and Barnet were to continue to advise their client departments as many were being outsourced. Where services have been outsourced to private companies the only way we could continue to provide legal services to them was through the ABS Linda Walker said. I think that for other organisations that have either gone down that road or are looking at it the primary driver is to retain their clients. However Southwarks Forrester-Brown felt that the attention given to ABSs has proved to be a distraction from giving proper consideration to other potential responses to the challenges faced by the sector. These include more creative ways of working with private practice the development of centres of excellence between authorities in key areas such as procurement and contracts and the continued evolution of shared services arrangements for example by working collaboratively to ensure that routine work is handled at a junior level across authorities to drive efficiencies. I think theres a bit more creative thinking to be done about what that relationship with the private sector could look like and how that could be offered more widely across local authorities and I take the view that my legal department My legal department can be working with a series of models that helps us to deliver an efficient and effective legal service. There may be other creative options that weve still not really explored in part because we have spent so much time exploring the ABS model. Doreen Forrester-Brown London Borough of Southwark The Legal Department of the Future February 2016 LocalGovernmentLawyer22 can be working with a series of models that helps us to deliver an efficient and effective legal service she told delegates. I think that can be specific to the types of work that youre doing - there may be certain areas of your work that fit well with a shared service some that work best in-house and others that may be suitable for doing through an ABS. I certainly do believe that we will continue to have in-house teams. But within that there are a number of models and there may be other creative options that weve still not really explored in part because we have spent so much time exploring the ABS model. Thriving in ambiguity Underpinning the topics discussed at the roundtable has been a fundamental change in the role and purpose of local government lawyers especially at the senior end. The rate of change in the local government legal sector is accelerating and the role of local government lawyers is changing with it. As the South London Legal Partnerships Paul Evans pointed out to delegates dealing with these issues is no longer ancillary to the day job of being the lawyer to the council they increasingly are the day job of senior lawyers. Everything weve talked about everything weve talked about in terms of strategy everything in terms of our priorities everything in terms of capacity for ABSs and trading services and marketing and relationships - if that is not part of your day job now I would revise your job description he said. Call it your day job. And say these are actually what were responsible for. Because that is the way practices move forward and can meet all these issues head on with a chance of landing successful solutions. This applies equally to lawyers further down the chain. Amongst the authorities represented at the roundtable HB Public Law has specifically added the ability to thrive in ambiguity to their lawyers jobs descriptions while Essex Legal Services has implemented a change management training programme to in the words of Angela Hutchings get people comfortable with the idea of being uncomfortable. That there arent all the answers out there she said. Sometimes youre going to try something and its not going to work but you just have to keep moving forward. Many of the themes discussed at the roundtable are still at the early stages of development and when it comes to predicting the future for local authority legal departments the only certainty is that further change is inevitable. Local authority lawyers will need to be adaptable and flexible enough to work with it. In the meantime as Birminghams David Tatlow pointed out that the shape of local government legal teams will change in future should not be taken as a criticism of the job that local government lawyers have done to date. There is a danger that all this talk of change implies that local government lawyers arent fit for purpose but that couldnt be further from the truth he said. I dont think were thanked enough for what weve done for what were doing. Collectively we ought to be very proud of what weve done and are doing in legal services and we should look at these challenges in a very optimistic and a forward thinking way. Derek Bedlow is the publisher of Local Government Lawyer. LocalGovernmentLawyer The Legal Department of the Future February 2016 23 One of the biggest management factors for local authorities in moving towards shared legal services is improving cost efficiency. The Governments current deficit reduction plan requiring public bodies to make significant savings until at least 201819 has given an added urgency and impetus for local authorities to consider their options in that regard. The Local Government Association currently estimates that there are 416 shared services across the country including shared IT systems fire services back-office and professional services and some front-line services which have achieved a 462m saving to date. In terms of local authority legal departments shared legal services can be very beneficial in drawing on existing expertise capacity and purchasing power and in some cases even creating profit by turning the shared services into a commercial venture. What are the potential advantages of shared services Reducing duplication and benefitting from cost savings through pooled resources knowledge and expertise which can be extremely useful where one local authority has particularly strong legal expertise in an area for example child care but less so in another for example planning. Increased efficiency and productivity by streamlining processes introducing common standards and making full use of capacity. Depending on the size and type of the shared service implementation costs may be kept fairly low. Ability to purchase legal services from other local authorities with the benefit of the partner authority having in-depth knowledge of the culture and workings of local authorities. Potential financial benefits in selling legal services in the event of spare capacity shared legal services are already being sold to other local authorities combined authorities arms-length management organisations charities and not-for- profit organizations blue light services housing associations and schools academy free and maintained. What are the potential disadvantages of shared legal services Viability of the model upfront cost procedures i.e. any procurement process required Solicitors Regulatory Authority SRA compliance if applicable and disruption cancelling out long-term savings. This will largely depend upon the size and type of the model chosen. Disconnect between legal teams and local authorities if they are not working exclusively and closely with their own authority. Conflict of interest between prioritising work for own authority versus partner local authority. Cultural fit and decision-making process issues. These issues need to be considered and streamlined so far as possible from inception. What are the delivery models for shared legal services Multi-authority collaborative arrangements may take a number of forms i.e. Partnership arrangements with other local authorities including sharing work allowing partner authority legal teams to retain independent status. Fully integrated shared services teams i.e. local authorities merging their own legal departments to create a shared legal service to be managed jointly or by a lead partner. This arrangement can be documented by way of a memorandum of understanding or other agreement setting out the parties respective responsibilities etc. Establishing a joint committee with representatives from all partners to which the service functions could be delegated under ss101 and 102 of the Local Government Act 1972. Joint procurement of external provider to deliver shared legal services to all of the authorities. This can be achieved through public sector partners or public and private sector partnerships. This external provider may be wholly owned by partner authorities or may be a private sector service provider. An important consideration in using an external provider is whether or not the scale of the proposed shared services The LexisPSL Local Government team explain the background to and advantages and disadvantages of shared legal services in achieving improved cost efficiency within the public sector. A short guide to shared legal services The Local Government Association currently estimates that there are 416 shared services across the country including shared IT systems fire services back-office and professional services and some front-line services which have achieved a 462m saving to date. The Legal Department of the Future February 2016 LocalGovernmentLawyer24 makes it viable to go through any tendering process required in the event that the model requires compliance with procurement regulations. Using this type of model may also allow local authorities to turn the shared services into a commercial venture by providing services for profit. There are a number of contractual structures for this model including framework agreements entered into by lead partners and consortium agreements with all partners. Examples of shared legal services There are already numerous shared legal services models in existence including LGSS a merger of Cambridgeshire and Northamptonshire county councils corporate services into a single shared service which is now a law firm wholly owned by the councils specialising in services to the public sector. LGSS has partnerships across the region with a number of other public sector organisations including other councils and also NHS bodies adult care services and education bodies. HB Public Law is also a single shared service working with other public sector organisations. EM Lawshare an East Midlands consortium with 87 members from various public sector organisations and six partner firms which deliver the whole range of legal advice at discounted rates. Partner firms receive a substantial amount of work and accordingly offer added value such as free training. The consortium is governed by a full tendered framework agreement and is non- exclusive meaning members are free to instruct other firms. Another consortium with a similar set up is the North West Legal Consortium which has 43 members three partner firms and a barristers portal with 20 sets of chambers registered and offering discounted hourly rates and fixed fees in a range of areas. Public Law Partnership this has 30 members in the East of England. There is no framework agreement with private sector law firms because the aim is to carry out as much work and knowledge sharing as possible within member LAs. If you would like to read more quality articles like this then register for a free 1 week trial of LexisPSL at www.lexisnexis.co.uken- ukproductspslfreetrial.page 187 Fleet Street offers the highest-quality expert Trading Standards and Regulatory law barristers to Local Authorities. Our barristers are adept at providing cost-effective and robust legal solutions in Trading Standards investigations and litigation. Members of chambers also have extensive experience in dealing with Confiscation Orders under the Proceeds of Crime Act 2002 from advice at the outset of a case to the conclusion of confiscation proceedings. 020 7 430 0430 chambers187fleetstreet.com The Legal Department of the Future February 2016 LocalGovernmentLawyer26 The concept of obtaining more for less is not controversial but creation and implementation of a strategy to drive internal efficiency can be unless fully focused and clear. There are a number of continuous improvement models recommended by management consultants. The checklist right summarises the most simple to use in the context of contemplating the delivery of shared legal services. It is known as the DMAIC model and requires a sequential analysis of each of five stages define or identify the area for improvement measure analyse improve control. This process will need to be repeated in relation to each area for improvement. It is sensible to prioritise analysis of the key performance indicators KPIs for a legal department for example the core KPI of any legal department is the delivery of legal services. When arranging shared legal services previously provided by a number of different legal departments an immediate efficiency saving may be the adoption of common working practices. Remember that the tool is adaptable to fit any process and there are no constraints on how it can be used. If you would like to read more quality articles like this then register for a free 1 week trial of LexisPSL at www.lexisnexis.co.uken- ukproductspslfreetrial.page Improving internal efficiency The LexisPSL Local Government team provide a checklist for a continuous improvement model in the context of contemplating the delivery of shared legal services. LocalGovernmentLawyer The Legal Department of the Future February 2016 27 Step What does this step involve Why it is important Define identify Identify what the issue or problem is. The scope of the problem needs to be defined and the symptoms stated clearly and succinctly. The problem may not be cast in stone at this point you may have defined what you believe the problem to be but once you have complete steps 2 and 3 the problem may need to be redefined. For example you may start by defining the problem as being we currently use too many different processes to achieve the same objective. After measuring and analysing the problem this might be restated as we need to create new internal best practice guidance. It will give the project a clear focus and enable to you explain to everyone exactly what you hope to achieve. Measure Measure the cost and effect of the problem. Typical questions you need to be asking during this stage to understand the issues around the working practices are how many protocols are in place and how closely are they adhered to how many precedents and are there and which precedents are most frequently used how many different legal know how providers do we have what acknowledged experts do we have what is the consequence of the variance in procedures how much time and money can we save by streamlining our working practices You may also reach an incorrect conclusion about what the cause of the problem is or the problem may be bigger or smaller than you have imagined. Analyse Once you have all the data from your measurements you can then get to the heart of the problem. During this stage you will pinpoint the bottlenecks that give rise to duplication of resources. You need to consider and test theories about the causes of the problem you are seeing and focus on the main root cause or causes. You also need to establish the priorities as it is unlikely you will be able to change everything at once. Improve During this stage several sequential activities need to be performed generate ideas for resolving the issues identified evaluate the alternatives to determine the best route forwards design improvements taking into account resources and training requirements identify how you will get people engaged and enthused about the new process prove it works by running a pilot or simulation implement the new process according to your project plan. When evaluating different possible solutions the costs of the solutions need to be compared to the costs of the problem in order to establish a robust business case. The key factors in this stage are creativity and feasibility i.e. generating a range of possible solutions and then evaluating them to determine the best route forwards. Try to involve a number of people when generating possible solutions to give yourself a broad span of ideas and creative solutions and maximise the prospects of your staff accepting any process changes. Control This stage is all about embedding the new processes so they become business as usual. This may include monitoring the process more closely for a time and providing additional support and training as and when required. It may also be advisable depending on the size of the new process to include it within appraisal criteria so its importance is understood by all employees. During this stage you need to re-measure the process so you can compare the data to the measurements taken earlier in the project and establish whether or not it is delivering the desired and anticipated improvements. It is a good idea to make all measurement data as transparent and public as possible so far as confidentiality allows in order for employees to see the difference the new process has made. The Legal Department of the Future February 2016 LocalGovernmentLawyer28 The automation of legal services is not a popular concept amongst lawyers. The thought of a tick box mentality among less experienced staff for commoditised legal advice is enough to put many talented lawyers off the legal profession altogether. However using tools such as workflows to automate processes can be an effective way of supporting client departments to do more for themselves and using client portals to provide routine advice as well as self-service updates can reduce your teams workload while maintaining an excellent service for the council. Local Government Association figures show the amount of central government funding available to local authorities has dropped 40 since 2010 and austerity is not likely to end soon. Yet despite these figures local authorities are still responsible for supplying core services that meet legal standards regardless of greatly reduced resources. So it is not surprising that the 100 heads of legal involved in the Local Government Lawyer survey put cost controls and budgetary issues at the top of their list of management challenges. The second biggest management challenge facing legal teams is a lack of experience in client departments 81 of respondents expected their teams overall volume of work to increase in part as a result of client departments losing corporate memory along with the growing number of innovative projects local authority departments are embarking on to generate income. The combination of more complex projects that have greater legal considerations and client departments with less experienced staff has led to an increasing need for input from legal teams with fewer staff and less capacity. Alongside this 46 of heads of legal are expecting the number of junior lawyers working in local government legal teams to increase. Taken in tandem with an expected decrease in senior staff teams will need to restructure to accommodate lower levels of experience with the law although junior lawyers training more extensively covers the use of new technologies. Helping clients to help themselves Altogether this helps to explain why excessive workloads were cited as one of worst aspects of working in local government legal today. How could workloads be reduced More support staff and better IT were two of the favourite suggestions. But what if client departments could take the place of support staff What if routine advice was readily available for less experienced internal clients What if technology was used to help ease the burden of fiscal fatigue and ever increasing expectations A common concern across local authority legal teams is the balancing act between empowering client departments and needing some dependency from them to justify the legal teams existence. Although automating some services through the use of technologies can make it seem as though the legal team is providing less value efficiency tools such as workflows and client portals are best applied to clearly defined and routine processes. The types of varied and complex work that are the reason many lawyers choose a career in local government cannot be delivered by technological platforms. The exercise of judgement applied to a specific circumstance and put in context of applicable laws can only be done by trained and knowledgeable professionals. So asking internal clients to complete a Tanya Corsie of Iken Business explains why you should be using technology to improve your service. Dancing with the devil LocalGovernmentLawyer The Legal Department of the Future February 2016 29 workflow for a routine case and to submit their information via a portal not only relieves some of the added pressure of administrative work for lawyers and support staff but frees up your team to focus on the work they enjoy and can provide value doing. The use of technology does not even have to end at setting up cases. Client portals can also be used to reduce the administrative burden of keeping clients up to date by providing self-service access to information about the cases your team undertakes on their behalf. With growing numbers of people considering technology to assist their teams we have noticed more frequent requests to include mandatory fields in workflows. This prevents users from progressing to a different section of a workflow or being able to submit it without completing all of the required fields ensuring your team has everything they need and saving time following up for information. Risk management Using workflows can also mitigate risk. By mapping the processes for routine work important information and regulatory steps are set out for clients and junior team members. This not only saves time and ensures consistency but helps you to clearly demonstrate compliance with Lexcel and practice management standards. The fact that more people are asking for workflows with mandatory fields could well be a symptom of less experience within legal teams in combination with less experienced client departments. However adopting workflows and increasing the use of client portals to automate aspects of your service should not be seen as a means to reduce cost at the expense of the service you provide. In fact they can be ways to relieve some of the pressure on your team while ensuring that legal standards are being met despite less knowledge and experience. They can also be ways of freeing up your staff to do the work that interests them and to even save enough time for members of your team to take part in more training or specialist activities ultimately improving the overall level of experience and job satisfaction within your department. Perhaps the adoption of workflows and client portals could even improve the results of future surveys Tanya Corsie is Director and Chief Operating Officer at Iken Business Ltd. Adopting workflows and increasing the use of client portals to automate aspects of your service should not be seen as a means to reduce cost at the expense of the service you provide. The Legal Department of the Future February 2016 LocalGovernmentLawyer30 In 1991 68 of chief executives had a legal qualification. Lawyers were ideally placed to shape local authorities and make the most of the promised freedoms of the Local Government Act 2000. But by 2015 modern local government has placed the Chief Legal Officer down the leadership chain to Head of Service or Service Manager unlikely to sit on the councils Management Board. What has happened to us Didnt we want the top jobs anymore The legal function is no longer part of the brain of the local authority it is now arguably something of a limb. There has been colossal change in the delivery of local government legal services in recent years with the focus being on the structure of service delivery. Many councils are now part of shared service arrangements whilst the current trend in the sector is for council legal departments to pursue alternative business structures ABSs. This short article questions whether all the implications of changes to the structure of service delivery have been considered and at the same time seeks to give comfort that more traditional structures may still have a place in the local government landscape. Public v Private Economic pressures in the last ten years have seen at best stagnation or more likely decline in the resource allocation for local authority legal departments whilst during that same time period there has been a huge expansion of general counsel and in-house legal provision in the private sector. For example the number of in- house solicitors in England and Wales has doubled since 2000. One of the main reasons cited for the expansion of in- house legal departments in the private sector is financial pressures but in local government legal services those financial pressures have been the driving force in the shared service agenda. In addition to the cost savings of an in- house legal function the dramatic increase in the size of in-house legal functions in the private sector has not just come about because of cost savings but also because in-house lawyers are seen as relevant to the success of the business. In-house lawyers have an intrinsic knowledge of the operation of the business and therefore are able to play a greater role in mitigating risk for the organisation. Further that intrinsic knowledge of the operation of the business as well as the culture of the organisation enables in-house lawyers to help better shape strategic decision- making of the business as well as the day-to-day transactional work. The fear for the equivalent role in local government is that the influential roles in risk management and strategic decision- making will become more difficult for those authorities who have transferred their legal function to a shared service or outward-facing business. Indeed the point is that it is this role that is seen as vital in the private sector. However to carry out this role well there needs to be an understanding that it is this role which makes the legal function more relevant to a local authority than the day- to-day transactional work which up to this point has been the main focus. Indeed some companies in the private sector will outsource a lot of their day-to-day transactional work but retain the general advisory role in-house. Therefore whilst noting the success of many shared services and business opportunities taken by some legal services to bring in income the point should not be lost as to what should be the key role of the in-house legal function. Those councils which have maintained a traditional structure thus far are often better placed to mirror the role carried out by general counsel in the private sector. To do that role well it means much more than just a can do approach. There needs to be a completely pro-active approach and leadership from lawyers in suggesting and providing those opportunities to improve service delivery for the whole authority not just on the delivery of legal services as well as those opportunities to bring in income for the authority. It is well documented that there was insufficient use of the well-being powers under the Local Government Act 2000. The general power of competence is another area of opportunity for the legal function to show its relevance to local government. This is an opportunity we must not miss. Take the lead now. Paul Cummins is Head of Legal Democratic Services at Horsham District Council. The number of in-house counsel in the private sector has boomed as the general counsel role has grown in importance. Paul Cummins looks at the lessons for local government lawyers. Lead or follow In-house lawyers have an intrinsic knowledge of the operation of the business and therefore are able to play a greater role in mitigating risk for the organisation. The Legal Department of the Future February 2016 LocalGovernmentLawyer32 The survey of local authority heads of legal carried out by Local Government Lawyer has once again shown that the single biggest management challenge in the foreseeable future is cost control and dealing with budget cuts. Some 69 of respondents included it in their top three and for 47 it was the top answer. This shows a sharp increase from the 2012 survey which perhaps reflects the fact that as local government strives to reach the 40 savings required by the end of this financial year no department is immune from contributing. This is despite the fact that respondents reported increases in work with almost half expecting a significant increase of more than 10 and a further third expecting to see a rise of between 5 and 10. Work is not only increasing in volume but also in complexity. As councils look for new and innovative ways of meeting the funding gap this requires strong legal and governance advice in new and developing areas. As one respondent says We are a very forward thinking authority there is never a shortage of different schemes needing legal advice. The types of work quoted as driving the increase in legal work suggest that highly skilled and experienced lawyers are needed. Yet the reality reported is that councils are struggling to recruit good lawyers particularly in areas of growth. Planning property contracts and procurement are all reported as difficult to recruit to and almost half of respondents expect the position to become worse. In-house teams face an ongoing challenge of trying to meet demands in these areas as councils try to become more financially self-sufficient resulting in more commercial projects increased regeneration and budget strategies including sale of assets. In search of savings Like every other council service legal services have been working hard over the last few years to reduce costs through improved efficiency. Many have reached the point where it is difficult to make further savings without impacting on the ability to deliver to the standards required by clients although interestingly almost three quarters of respondents who were not actively considering a shared service stated that this was because they could meet their needs and improve efficiency within their current structures. There are also many in-house legal teams that have not made as much progress in making efficiency savings and now need to look at initiatives such as trading and shared services to take them to the next level of efficiency gains. It is also indicative of the very different circumstances facing councils and legal teams throughout the country. Delegates at the roundtable to discuss the survey results see p16 and colleagues who offered their views to Kennedy Cater reported that the pressure to make savings and consider new approaches depends on a number of factors including the financial position of the council as a whole geographic factors such as ease of access to potential customers or partners political and senior officer willingness to work in different ways and the skills mix of the legal teams. Some heads of legal had seen their proposed budget savings target reduced because politicians and senior officers did not wish to accept the potential risks of a reduced legal service others had seen their budget increased to recognise the increasing demands on the legal service yet some were still struggling with challenging budget cuts of up to 40. It was obvious from the survey and the roundtable that although best practice can be shared there is no one size fits all approach and heads of legal have to create legal services that meet the needs of their own council with whatever budget is available to do so. With the local government sector under huge pressure legal departments are being tested to the limit. Helen Edwards of Kennedy Cater analyses how they are responding. Up for the challenge LocalGovernmentLawyer The Legal Department of the Future February 2016 33 Tougher times for external providers Those who cannot meet needs and achieve further savings within their current structures look for different ways of delivering legal services. The responses to the survey suggest that heads of legal will not be turning to external providers to fill the gap in capacity or skills. More than 90 of respondents already outsource less than 20 of their legal work and more than half expect their budgets for external work to decrease with only 10 expecting an increase. The main reasons reported were costs with almost half considering rates for both routine work and specialist work to be too high. This will be unwelcome news to external legal providers who support local authority services although use of panels for both barristers and solicitors is widespread with three quarters of respondents using solicitors from panels and around half using barristers from panels. A surprising number report that they do not use panel suppliers at all 26 of respondents for solicitors and 35 for barristers despite the fact that those who do report reductions in legal costs of at least 10. This is perhaps an opportunity for those who do not currently use panels to find a way of making further savings. Shared services remain popular with more than a quarter of respondents already in some form of shared service and the same proportion actively considering it. Shared services have been a possible solution to the issues currently facing councils for many years yet more than half of respondents report that they have no plans for a shared service. Shared services first or last resort Interestingly the top three reasons given in favour of a shared service seem to be connected with budget issues namely internal efficiency and productivity gains financial pressures on legal departments and building resilience. The top three reasons given against a shared service seem more related to cultural issues namely members and senior officers want to retain an independent legal function sharing leads to a disconnection between legal teams and clients but also because the needs could be met and efficiency improved in the current structure. The comparison of the reasons for and against suggests that some councils will only consider shared services once they have exhausted all possibilities for efficiency savings within their current structure. We could therefore see a further growth in shared services if councils reach the position where they have no other alternative. Some respondents consider it preferable to make a positive and pro-active choice to share services before they reach the stage where there was no other way of survival. A quarter of respondents either have or are considering an alternative business structure ABS. However it is clear that an ABS is not always necessary to enable a council to trade as although only 25 of respondents either have or are seriously considering that option more than half of respondents are already trading services with other organisations. Some respondents recognised that an ABS was necessary for them to keep existing clients particularly if their councils strategy included transferring council services to limited companies because even if the companies were currently wholly owned by the council there was possibility of private involvement at a later stage and the in- house team wanted to be in a position to continue to work for those clients in that scenario. Building the client base A considerable amount of trading is possible within existing local authority powers however and it seems that there is a large potential market. Respondent councils are already selling services to ALMOs Blue Light services and charities to name but a few. There is also a healthy market with schools with around three quarters of respondents already selling legal services to both maintained schools and academy and free schools. One view offered is that trading services seem attractive to local politicians who are more reluctant to enter into a shared services agreement because they still feel that it is our legal department whereas shared services are sometimes thought to result in a loss of control over the legal department. For those that are not trading services the main reason given by over three quarters of them is that they do not have sufficient resources to take on extra work. Other reasons include lack of experience in working for external clients lack of sales and marketing experience and issues relating to competing needs of their own authority. Only 32 cite a lack of demand as a reason. This suggests that there is a potential market that some councils are unable to exploit because they do not have sufficient resources to do so. This is an interesting dilemma and one that tests a councils appetite for commercialisation. With the right mix of entrepreneurial skills it ought to be possible in some cases to create a convincing business case for increasing an in-house team to allow it to exploit the potential market. This is not without risks and it seems that the majority of councils who are trading services have started on a small scale using existing capacity until they are reasonably certain that the work will continue. There are mixed views from respondents as to whether trading services will put them in competition with each other and erode the collaborative Although best practice can be shared there is no one size fits all approach and heads of legal have to create legal services that meet the needs of their own council with whatever budget is available to do so. It seems that the majority of councils who are trading services have started on a small scale using existing capacity until they are reasonably certain that the work will continue. The Legal Department of the Future February 2016 LocalGovernmentLawyer34 approach that local authority in-house lawyers currently enjoy with each other and find beneficial. Many are keen that the public sector spirit and ethos of local authority legal services should not be lost others think that this is to some extent inevitable if councils are essentially bidding for the same work. Only time will tell what the practical effect of increased trading and general commercialisation of local authorities might be. Licensed to trade Interestingly from the careers survey also carried out by Local Government Lawyer it seems that working for a council that trades services with other organisations is a more attractive option than working for a shared service. A shared service is an attractive option in terms of quality and variety of work training and career development opportunities but perceived disadvantages were location more distant relationship with the home authority pay and the manageability of workload. One in four local government lawyers 28 say they are less likely to apply for a role in a shared service compared with only 7 who are more likely to. This is compared to 64 who regard the growth of traded services as an opportunity to acquire new experience and skills. So how should in-house legal departments face the challenge of becoming The Legal Department of the Future The budget pressures will not lessen the Local Government Associations Future Funding Outlook is predicting a funding gap of 9.5bn by 2020 if things do not change. The LGA has offered a number of proposals to central government in its paper A shared commitment Local Government and the Spending Review published June 2015. Some of the proposals are radical and any that are implemented will have a significant effect for local authorities and their in-house legal departments in terms of the capacity and skills needed. As one delegate at the round table said how can we know what the Legal Department of the Future should look like when we dont even know what the Local Government of the Future might be In the meantime in-house departments should continue to maximise efficiencies increase skills and build resilience and constantly scan the horizon and reinvent themselves as necessary to meet the future whatever it might look like. Helen Edwards is Head of the Public Sector Team at Kennedy Cater www.kennedycater.com the legal broker and cost consultant. Kennedy Cater works with a wide range of public sector and private clients managing an aggregate annual external legal spend in excess of 20m. 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For enquiries or bookings please contact Richard Worth on 01625 363045 or email richardlocalgovernmentlawyer.co.uk The Legal Department of the Future February 2016 LocalGovernmentLawyer36 These have been tough times for local government employees and while in-house lawyers have overall not been affected by job cuts to the extent of other staff they have not been spared the effects of austerity on their working lives. As the accompanying survey of legal department management has shown the demands on local authority legal departments are growing fast and keeping the best lawyers on board and motivated is essential to meet the growth in legal work. However the results of this survey and the comparison with its last iteration in 2013 show that there are some serious concerns for legal department management if they are to retain recruit and maximise the potential of their lawyers. Firstly lawyers were asked to rate on a scale of one-to-10 their general levels of satisfaction with a number of key aspects of their working lives see fig 1 below. What the results show is that while generally speaking happiness with working life has npt changed significantly in the past two years there are clear areas of concern for the future. The good what do local government lawyers like about their jobs As the responses to the satisfaction question show two aspects of life in local authority legal departments stand out for most lawyers quality of work and despite some comments about increasing workloads work-life balance. Quality of work attracted an average score of 7.1 out of 10 and work-life balance 6.7 although happiness with both has fallen since this survey was last conducted in 2013 when these two categories scored 7.4 and 7.0 respectively. Despite the pay freeze since 2010 satisfaction with pay and pension has remained steady since 2013 at 6.3 out of 10 it was 6.2 in 2013 while lawyers view of the culture and collegiality of their teams has improved slightly over the past two years to score 6.2 from 6.0. To add some context to the statistics participants were also asked open-ended questions about the best and worst aspects of working as lawyers in local government. The statistical results of the satisfaction question were borne out by the open-ended comments received. The weight of comments cite the main advantages of a local government career being work-life balance and annual leave entitlement although some questioned whether this would continue to be the case pension the quality and variety of the work the collegiality of their teams and wider councils and the opportunity to work for the benefit of the community. Some of the comments included The work is always challenging as we often have to interpret and navigate central government initiatives before central government have even thought about how initiatives work in practice. The pay is pretty good and the conditions not too bad although they have suffered some hits in recent years. Now things are recovering. The ability to learn about areas of law first hand which are not available in private practice. Good working team quality work which can significantly benefit the city and region altruistic rather than profit orientated ethos. Working for a local authority does still carry with it a feeling that you are doing something for the community. I really appreciate flexi time and the ability to buy back leave. Working for an organisation providing you with a much better understanding of the pressure and desires of the client which provides an ability to respond faster more comprehensively and in a more rounded manner to client needs. What effect have the cuts had on local government lawyers ambitions and morale Derek Bedlow looks at the results of our exclusive survey of more than 300 local government lawyers and assesses the implications for local authority legal teams. Cant get no satisfaction Fig 1 LocalGovernmentLawyer The Legal Department of the Future February 2016 37 Working in local government is like being a spectator to the experience of politics plotting and intrigue - like Game of Thrones without the decapitation The bad what dont local government lawyers like about their jobs A range of issues struggle to score more than five out of 10 including the manageability of workload 5.8 the quality of leadership 5.6 job security 5.4 IT and research facilities and professional development opportunities both scoring 5.3 compared with 5.6 and 5.5 respectively in 2013. Unsurprisingly there were many responses to the question of the worst aspects of working in local government many of which are directly related of the funding cuts affecting local government. Chief amongst these is the erosion of support services and facilities in many offices which some respondents say are diminishing the efficiency of legal teams while cuts to client departments are also having the effect of pushing work towards lawyers that could be more done more cost-effectively elsewhere. Declining funding means more and more admin being done by the lawyers which is less cost-efficient and leads to the wrong people doing the wrong jobs a false economy says one. A lack of staff in client departments means that clients try to push their jobs on to the lawyers. Meanwhile open-plan offices and especially hot-desking attract quite a lot of criticism. I resent working in a call centre environment with an unseemly early morning scramble for desks which indirectly discriminates against employees with primary child care responsibilities. Job security is also a worry for many as is the frequent reorganisation to which some departments have been subjected. The list of woes felt by many respondents is summed up by one who observes Over the last years the workload has dramatically increased and through a combination of cuts to the legal service itself as well as to client departments the pressure of the job has become much more telling the workload and pressure is becoming closer and closer to that experienced in private practice with working hours far exceeding contracted hours but with little incentive or reward to actually undertake the additional strain. Whilst workload and pressure has become and continues to become far closer aligned to commercial practice the financial rewards have remained at very much public sector levels causing ever increasing dissatisfaction with work-life balance and general job satisfaction. More fundamentally responses to this question picked up widespread concern about the diminishing status of local government in the public eye and its effects. There is the general feeling that the current Government thinks very little of local government generally says one. This does affect one of the rewards of working for a local authority which is that feeling of doing something worthwhile for the community. The lack of funding is now starting to have an impact with funding for future investment in the fabric of the council and also the community now being very hard to find. The status of legal teams within their Working in open plan is like being a galley slave without the drums. Declining funding means more and more admin being done by the lawyers which is less cost-efficient and leads to the wrong people doing the wrong jobs a false economy. The workload and pressure is becoming closer and closer to that experienced in private practice...but with little incentive or reward to actually undertake the additional strain. The Legal Department of the Future February 2016 LocalGovernmentLawyer38 authorities is similarly a source of some concern for many local government lawyers. There is an increasing lack of respect for the worth and value of legal within the authority says one respondent. In our authority legal are not even part of the executive management team and local government employment structures do not recognise professional experience in their pay and grading. The survey also asked respondents how they thought that their departments are perceived by clients. This found a clear majority 68 who still feel that their departments are seen as trusted advisers by their authorities compared with 18 who think they are regarded as a roadblock and 14 who felt they are regarded as being a remote service department. The open-ended comments on this question are more nuanced with the answer in some cases depending on which client department and which lawyer is being considered as a number of respondents point out. Certain departments see us as trusted adviser others see us as a barrier. Certain clients do not understand that bringing in legal services early is likely to be helpful and cost effective and more likely to lead to problems being detected when it is difficult to address them properly without causing additional cost or delay says one. Some departments seek guidance and assistance all the time others keep us in dark until the last possible moment which goes some way to fulfilling their assumption that we are obstructive says another. As well as creating more work for in- house lawyers the hollowing out of many client departments is also affecting the relationship between lawyer and client in many cases with the latter often described as failing to appreciate the nature and boundaries of the lawyerclient relationship. Coping with the loss of experience in instructing parts of the council is identified as a key challenge by heads of legal in the management survey and it is an issue that that causes concern at the coalface as well. Clients are becoming increasingly passive aggressive if they do not receive the advice they want and generally the decline in quality of instructions and personnel left within the organisation is a real problem says one respondent. Clients need to appreciate a professional service is being provided and that lawyers have codes of conduct to comply with and regulatory pressures says another. Outsourcing is a much more expensive option than an efficient and professional in-house service. Client departments must be made to understand they have to do the admin and non-legal work to allow the lawyers to do the legal work. and the ugly a career cul-de-sac By some distance the lowest satisfaction ratings were recorded in respect of career prospects which scored just 4.3 out of 10. Respondents were also asked what their career aims were see fig 2 and this question recorded a sharp drop since 2013 in the proportion of lawyers looking to move up into management from 44 to 36 and a concomitant rise in the number of local government lawyers happy to stay at their present levels which rose from 28 when this survey was first taken in 2013 to 32. It is OK to work in local government if you just want a job but not if you would like a career There appears to be a vicious circle of higher value work being sent out for lack of internal capability thereby denying the opportunity for in-house staff to develop the appropriate skills and experience. Fig 2 LocalGovernmentLawyer The Legal Department of the Future February 2016 39 one respondent concludes. The reasons cited for this by respondents include the reduction in the number of management positions due to the creation of shared services teams and the reduction in layers of management at local authorities in general. It is not a situation that is likely to improve in the near future as according to the results of the management survey the number of senior roles is predicted to fall in future as senior lawyers make way for junior and part- or non-qualified staff see article p43. This process has not gone unnoticed by staff Experience does not appear to count for much and although older more experienced staff were valued now it appears that the council wants younger staff one respondent says. The mid-point experiencedqualified staff are being overlooked and the more mature staff are retiring leaving a large gap. There increasingly seems to be a view in some quarters that working in local government is a great opportunity for lawyers at the beginning of their careers but that the career opportunities and pay make it much less attractive in the long term. Local government is a great option as a first step to gain high-level experience pre- and immediately post- qualification. I would advise the person to take that experience into an environment where it is valued including financially and given the respect it is due says one respondent. Talk is cheap There is an appreciation amongst most respondents that the capacity of management to address many of the issues identified is limited in the current environment but nevertheless the question of What steps could your employer take to improve the working environment for you elicited a wide number of responses. Many of these are around improvements to the office environment working in open plan is like being a galley slave without the drums says one facilities and support and commonly dealing with under- performing colleagues. As one respondent notes There need to be more performance management standards enforced and those who do not deliver need to be questioned about it. The greatest weight of comments however appeal for better communication from management both within the department and above. Time and again respondents complain that they are being kept in the dark about changes to their teams while others say that the lack of encouragement and appreciation from management can be extremely de-motivating. Managers should be valuing good employees rather than making them feel they are dispensable says one lawyer. Our section has lost two excellent lawyers because they dont feel valued and is about to lose another but The Legal Department of the Future February 2016 LocalGovernmentLawyer40 management is becoming more remote. Are local government lawyers special Another theme that emerges from various points of the survey is the desire for specialist legal skills to be recognised in grading terms as well as management skills. A large number of comments bemoan the fact that promotion and status can only be achieved by taking on more management responsibilities rather than through the development of high- level expertise in a given field of law a comment being that the only chance of promotion or a pay rise involves managerial tasks and less opportunity for quality legal work. There is no reward for experience or dealing with a high complexity workload. At face value promoting people based on their expertise would seem to be an unnecessary expense yet in some areas see article p43 management complain that they can only resource key areas such as procurement or planning through the use of expensive locum staff or by going out to private practice so the development of more specialist in-house practitioners perhaps in conjunction with other authorities would seem to be a win-win situation. The expense of using locums or private practice could be reduced whilst the career development prospects for many lawyers would be enhanced. Yet at the moment there appears to be a vicious circle of higher value work being sent out for lack of internal capability thereby denying the opportunity for in-house staff to develop the appropriate skills and experience. Due to limited resources big time- consuming projects can be outsourced as there may be limited capacity to deal with them in-house suggests one respondent. These should be retained as they are interesting offer a chance to develop skills and enable lawyers to deal with similar projects in the future. Such an initiative would potentially find a receptive audience. The survey went on LocalGovernmentLawyer The Legal Department of the Future February 2016 41 to ask respondents whether they would prefer to be specialist or generalist lawyers 58 say that they would prefer to be specialist 22 generalist with the remaining 20 expressing no preference. The law is now so complex and fast- moving that the old generalist will disappear says one in-house lawyer. Clients appear to have more confidence in the advice given by specialist lawyers says another. That said the variety of work offered by local authority legal departments remains a significant attraction and the dilemma facing local government lawyers in this respect is succinctly summed up by one survey participant as follows The variety of local government work is the main reason for my job satisfaction and desire to remain in the sector. This is however balanced by the desire to have more certainty in having a specialism allowing you to provide more comprehensive advice in a faster and more direct manner. This pressure becomes more telling as further cuts take place resulting in clients referring issues for legal advice at a more crucial point than would otherwise have been the case. Shared services Given the potential demand for more specialist services from an individual authority is likely to be weak then the obvious place to develop more specialist roles would be within shared teams. Moreover if this was to enable an alternative career path for local government lawyers then that may also create some enthusiasm for shared services which is lacking at the moment. Most lawyers seem resigned to the growth of shared services rather than enthusiastic about them. The proportion of lawyers expecting to be part of a shared service in future has jumped from 21 to 31 on just two years but they are still a turn-off for a significant minority of local government lawyers 28 of whom say that they would be less likely to apply for a job in a shared services department compared with just 7 who would be more likely to. There needs to be more communication as to what the benefits are of a shared service as the majority of staff are struggling to see the benefits says one respondent. When asked what effect being employed in a shared services department has on key aspects of lawyers working lives and careers a majority are positive about the effect on the quality and variety of the work they do and career development and training prospects and neutral on the impact on support and facilities job security culture and perhaps surprisingly on their relationship with their clients. A small majority are negative about the effect of shared services on pay and conditions and a large majority think that working in a shared services team will have a negative impact on the manageability of their workloads and the location of their offices. The experience is very different from working for one authority or even two says one employee of a shared service. Once you move above that the dynamics are different and the cultural variations between your clients is very significant. A large shared service is both the best and the worst place to work in times of austerity. Trading out of trouble There is more positivity amongst in- house lawyers about working in a department offering external legal services however. When asked about their attitudes towards working for external clients 62 agree with the statement that the growth in providing legal services to other organisations is an opportunity for me to acquire new experience and skills compared with 24 who agree with the statement that it was not the reason I joined local government and a risk to the public sector ethos. The remaining 14 agree that it is a necessary evil if it improves job security. Meanwhile and in contrast to the prospect of working in a shared services department almost as many respondents 19 say they would be more likely to apply for a job in a team with a high number of external clients as the number About the surveys Two surveys were conducted between July and November 2015. The first surveyed heads of legal at local authorities in England and Wales on the management issues they face and their plans for the future. 100 heads of legal took part. The average department size was 26 and the breakdown by type of authority is as follows First tier authority 17 Second tier authority 34 Unitary authority 26 London Borough 14 Metropolitan authority 9 The second survey on careers and job satisfaction issues was conducted amongst the local authority lawyers that subscribe to the Local Government Lawyer newsletter. 312 lawyers took part in the survey. The results of both were compared with previous management and careers surveys conducted in 2012 and 2013 respectively. The Legal Department of the Future February 2016 LocalGovernmentLawyer42 that would be less likely 25. As well as providing more experience for local government lawyers the development of trading is also described by some respondents as a way for legal departments to raise their profiles within their authorities and provide better job security. On balance however the welcome for external clients is a cautious one. There are widespread concerns that too many external clients will raise workloads to unmanageable levels and there are a few caveats expressed especially around the prioritisation of work between in-house departments and external clients. Others are sceptical that their departments can make trading work from a marketing and practice management perspective. Provided those other organisations are non-profit making or public sector bodies it is good if local government lawyers can provide their legal services at cost rather than those bodies having to pay for the inflated profits of partners in large private practice commercial firms says one. The problem is when local government sees providing services to other organisations as a way to generate income rather than a sensible use of surplus capacity or a reason to hire additional capacity. Why does it matter Many local authority lawyers have significant concerns about key aspects of their working lives in particular the perceived lack of career prospects and the link between morale motivation and productivity is well established. Poor working conditions can also have an adverse effect on recruitment and retention especially at a time when demand is rising and competition for staff from private practice is acute in many areas. As the demand for local government lawyers increases respondents to the management survey report that recruitment is already difficult and set to get harder still. As a respondent to the management survey says I feel very worried when I see a general dumbing down or statistics which seems to suggest that some of our lawyers are just coasting because they dont see any promotion prospects or a career in local government. There are no obviously simple solutions although the request for more information and transparency about forthcoming changes is relatively cost- free. In time the development of more senior specialist roles could also be self- financing in the longer-term if they reduce the dependency on law firms or locums. The good news at least is that there remains a significant commitment to working in local government amongst in- house practitioners. Despite all the challenges they face a substantial majority of in-house lawyers 70 would still recommend local government as a career and a slightly higher proportion 72 would recommend their own departments as a place to work. These figures are lower than the figures recorded in the equivalent survey taken in 2013 when 77 said they would recommend a career in local government but they demonstrate a willingness amongst the majority of local government lawyers to stick with the sector even in these difficult times. There are still many positives to working for a local authority one in- house lawyer concludes. It is heartening to see how local authorities are embracing change to meet the challenges whilst still maintaining that local authority ethos. Derek Bedlow is the publisher of Local Government Lawyer. LocalGovernmentLawyer The Legal Department of the Future February 2016 43 Doing more with less has become a clich for local authority staff but for legal departments it is a stark reality as workloads rise and resources fall. One solution to this conundrum for many departments is to reshape their teams. While slightly more respondents to the management survey expect their departments to grow than to shrink 34 v 31 the profile of departments in the foreseeable future is likely to become quite different as more senior roles are cut to make way for more junior lawyers legal executives and paralegals. So for example 51 of the 100 heads of legal that took part in the survey expect the number of paralegals and legal assistants to rise compared with just 13 who expect the number to fall. The numbers of legal executives and junior solicitors are also expected to rise albeit less spectacularly but more heads of legal say they will cut senior and principal solicitors than expect their numbers to rise see chart below. We need to save money without reducing capacity and headcount too much as volumes are not decreasing says one head of legal. Many local authority legal departments are behind the curve compared with private practice in implementing state-of the-art legal technology. Nevertheless case management systems workflow technology and enhanced research tools are beginning to facilitate the reengineering of departmental structures by enabling less experienced lawyers and non-qualified staff to handle matters that would previously have been the preserve Derek Bedlow looks at how legal departments can organise recruit and retain their staff. The shape of things to come The Legal Department of the Future February 2016 LocalGovernmentLawyer44 of more experienced practitioners. Any increase in staff is likely to be at the nonpart qualified level due to cost and a robust case management system facilitating lower-end process-driven work being dealt with at a lower qualification level one head of legal predicts. As well as the cost another reason for hiring non-qualified staff more is the difficulty that many departments currently face in recruiting more experienced lawyers especially those with in-house local government experience. As workloads have risen the survey of heads of legal shows that recruitment and retention is the third biggest challenge for departmental managers it was eighth in 2012 the last time this survey was produced and many expect the problem to become more acute. Four in five heads of legal say that they find it difficult to recruit good lawyers in the present market while 15 describe it as very difficult. When the same question was asked in 2012 66 said that recruitment was difficult 12 very difficult. The most difficult disciplines to recruit into are planning mentioned by 53 of respondents procurement 50 and property 29 while for those authorities that have responsibility for social care adult social services lawyers and child protection lawyers are also in short supply. Respondents to the management section of the survey put the reasons for this situation down to a number of factors but pay freezes and the erosion of other benefits such as the Local Government Pension Scheme have left many local authorities looking unattractive compared with a recovering private practice in many areas of the country. Heads of legal were also asked whether they expect recruitment to become easier or harder in future not one expects it to get easier while 40 think it will become harder still. Terms and conditions in local authorities stagnated during the recession and are now unappealing says one. We need to do something to change this. Those that are recruiting for shared services teams have a harder task again with 28 of respondents to the careers survey saying that they would be less likely to apply compared with just 7 who would be more likely. However departments that provide legal services to external clients are less of a turn-off for prospective recruits overall while 25 of respondents say they would be less likely to apply to such a team almost as many again 19 would be more likely to do so. The expansion of trading could also help departments constrained by council-wide cuts by deriving additional income from sources beyond the host authority. However one head of legal warns that this could also be double-edged sword from a financial point of view. I do think this business about paying rewards in the future is going to be more Terms and conditions in local authorities stagnated during the recession and are now unappealing. We need to do something to change this. LocalGovernmentLawyer The Legal Department of the Future February 2016 45 important he said. I cannot see how I can task some of my team to deliver 1m income next year for me and accept thats just part of the job. Pretty quickly theyre going to look at private practice and see that seems to be exactly the same job that theyre currently doing but its paying more money. I cannot see how you dont have some modest reward for meeting your income targets. Why else they would do it Getting the best what do lawyers look for in an employer Respondents were asked to rank their top three most important factors in deciding where they work. Four stand out in order Paypension included in the top three by 62 of respondents work- life balance 59 quality and type of work available 53 and location 42. Of these work-life balance and qualitytype of work are actually the most commonly given first choices at 25 each. Reflecting the general state of disillusion with promotion prospects amongst local authority lawyers satisfaction with which was the lowest of all the working key criteria see article p36 career prospects are not a primary concern for the vast majority being included in the top three by just 17 of respondents. A similarly realistic view of the ability of local authorities to provide job security seems to have been taken by respondents a fifth of whom 22 place this category in their top three considerations. Instead when compared with the last careers survey in 2013 the importance of work-life balance has increased quite sharply up 8 while the importance of career enhancement has dropped by 5 in two years. One consequence is that if more lawyers are content to stand still rather than move on to enhance their career prospects it will lead to greater inertia in the recruitment market making the hiring of experienced lawyers harder still. Derek Bedlow is the publisher of Local Government Lawyer In the pipeline Forthcoming supplements from Local Government Lawyer and Public Law Today include Adult Social Care and Child Protection Dispute Resolution Planning Property and Regeneration Public Procurement Advertising from 495 VAT sponsorship from 1795 VAT. For further information please contact Richard Worth on 01625 363045 or email richardlocalgovernmentlawyer.co.uk.