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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