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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