Local government lawyers are in demand like never before, but this creates many additional pressures on legal teams. To try to find some solutions to the issues identified by the survey, Local Government Lawyer convened some of the country’s most experienced local government lawyers to a roundtable session, held at the Charles Dickens Museum in London. Derek Bedlow reports.
Topics discussed included the pros and cons of shared services, alternative business structures (ABS), external law firms and the potential effect of AI on local authority legal practice. But the main talking point of the day, was the one that topped the list of management concerns in the survey – recruitment and retention.
In the survey, 70% of heads of legal included recruitment and retention within their top three challenges, more than any other factor. “We are struggling to recruit across the board, in all disciplines,” said one delegate.
So what can local authorities do to address the problem? The current situation has come about through the combination of a substantial and ongoing spike in legal work, a real-terms pay cut following austerity and the low number of training contracts offered by local authorities over the past 20 years.
“I think that our structures are often slightly top-heavy,” Quentin Baker, the Chief Legal Officer at Hertfordshire told the session. “There are not enough paralegals; not enough focus on trainees. It’s not just that they’re very good value for money but also because we need to do something to try and tackle recruitment shortage and growing our own is one of the more positive things that we can do.”
With the number of law students relative to the number of training contracts available at record levels (18,850 UK students started law degrees in 2018 alone, according to the Law Society, compared with 5,719 training contracts), those authorities that have advertised for trainees report very strong responses, both in terms of quality and quantity.
Local government does face a couple of challenges when looking for the best prospects however. Firstly, the larger commercial law firms invest large amounts of money in marketing themselves to students and are generally much more visible to prospective candidates. Secondly, unlike most law firms, many local authorities are not in a position to offer trainees a full-time position on completion of their training contracts.
In the graduate recruitment market, the ‘trainee retention rate’ (typically 80% -90%) is a key metric for prospective trainees and one in which local authorities will compare unfavourably. Moreover, it can mean that local authorities risk taking on trainees that do not have a long-term commitment to the sector and disappear to the private sector once qualification is achieved.
HB Public Law, the shared legal service of the London Boroughs of Harrow and Barnet, is one legal department that has grasped the nettle of trainee recruitment, and now offers five training contracts a year. According to its head of legal, Jessica Farmer, of the past 10 that have qualified, eight remained with HB Public Law.
“We found that growing our own has really helped us with recruitment,” she said. “We were thinking to ourselves that we should have done this years ago.”
HB does not budget at the start of a training contract to take on newly-qualifieds at the end, but the growth in demand for legal services means that finding them permanent roles has not been a significant problem when the time comes.
Fiona Thomsen, head of shared legal services at shared service the South London Legal Partnership (SLLP), said that being a large department was highly beneficial in this regard. “If you have 80-90 fee earners, you inevitably have some churn which means that there are vacancies coming up pretty much all the time,” she said.
As well as conventional trainees, there was a lot of enthusiasm for the use of apprenticeship schemes which take A-level students through to qualification as either paralegals, legal executives or solicitors although there is some concern that these routes are not available to LPC graduates.
Although it is early days, it was thought that apprentices are more likely to stick around following qualification, not least because the time required (six years for a solicitor apprentice, for example) means that they are much more likely to be ingrained within local government by the time of qualification than an LPC graduate who is in and out in two years.
One note of warning, however, came from one participant who suspected that the present enthusiasm might wane if in due course the recruitment situation for experienced lawyers eased in future.
“We’ve tended to blow a bit hot and cold on growing our own trainees,” the delegate said. “When we’re desperate to recruit people then we get very hot on trainees and growing our own and when times are better, we’re perhaps less positive about that and we would look to recruit ready-made lawyers to fit the roles we’ve got.
“It would be nice to think this is a sort of a long-term trend that we’re now adopting but I’m not sure it is because sometimes the structure of things like training contracts don’t really suit what we want at the end of it.
“At the moment we want a load of childcare lawyers, but the structure of a training contract doesn’t actually get you there. So it is a good way of recruiting for the long term but not necessarily where there are particular gaps that you can see coming through in your system.”
Getting ahead in the recruitment market
When it comes to hiring and retaining more experienced staff, the barriers facing many local authorities are well-rehearsed – pay, prospects and perception amongst them. It was also noted that the locum market had matured and become more attractive to many local government lawyers as the gap in pay between permanent and agency staff grows wider. Using locums has become a fact of life for many local authorities.
It was agreed that the imposition of IR35 last year – in which many locums are now deemed to be ‘employees’ rather than ‘contractors’ for taxation purposes – has made agency staff more expensive but (as the survey also found) not reduced their usage very much.
While some delegates said that they tried to operate a temp-to-perm policy whereby locums were offered permanent roles after a while, in the in-demand fields, such as child protection, procurement, projects or property, the money that lawyers can make as locums can far exceed the value of the pay and additional benefits available to permanent employees.
“[For most lawyers] it used to be a choice of either going to the private sector or staying local in government, but now a number of our agency staff do agency work because that’s their preferred choice,” said Mark Hynes, Director of Legal and Governance, London Borough of Waltham Forest. “There are lots of advantages and often they’re able to earn more than they would do in a permanent role in a local authority. So, I think that’s another dynamic that may be adding to the difficulties of obtaining and recruiting staff.”
Nevertheless, as the careers survey shows, local authorities do hold some trump cards when it comes to recruitment, most notably around the quality and variety of work they provide (especially to more junior lawyers) and the work-life balance they can offer.
When pitching to potential recruits – whether from local government or elsewhere – it was agreed that local authorities need to emphasise these points in their advertising. From our experience of recruitment advertising at Public Law Jobs, this does not happen very often with many ads using very generic language.
To this end, HB Public Law provides open evenings and even week-long work experience to enable lawyers – especially those from private practice – to a get real feel of what working in a local authority is like before deciding whether it is for them.
“I worry though that if you do try and compete on pay sooner or later we’re going to lose on pay,” John Tradewell, Director of Corporate Services, Staffordshire County Council. “I don’t think we can win that one long term. I think that the kind of key message for us is to focus on everything other than pay and make ourselves the best on all those things. I think the [importance of] work-life balance came out in the survey which I think is really important for us. That is something we can offer.
“Sometimes we talk about it and then still work people 12 hours a day or whatever... and that’s something we’ve got to watch for if we are going to make that our big retention offer but also at the home working we’re very good... the agile working. I think we can do really well on that side of things and also people tell me that the Millennials – whoever they are – are much more interested now in how they can make a contribution than perhaps people in the past.
“local government should be able to smash it out of the park in terms of what we can offer people in terms of making a difference in people’s and communities’ lives. Those are the sort of areas where perhaps we need to sort of focus on rather than trying to compete with the private sector.”
Another simpler solution to encouraging more applicants for local authority vacancies was to make the application process easier. Almost all local authorities require applicants to fill out an extensive application form as the first stage of the application process outlining how their experience meets a long list of skills and experience. This is a task which can take several hours and acts as a barrier for many would-be applicants, especially those coming from outside the sector.
In the private sector (and for locum solicitors), it is much more common practice for the initial application to be made by sending a CV and covering letter. One delegate whose HR department did (eventually) relent to allow candidates to use CVs found that it has had a positive effect, but described it as a “real battle” to persuade HR that the equalities monitoring data could be collected without candidates having to complete the full application form.
More fundamentally, and as also noted by many respondents to the careers survey, there are a number of structural issues within local government that work against them in the recruitment market, not least the lack of financial recognition for lawyers that develop technical expertise without the management responsibilities that usually come with promotion to senior or principal roles. As one head of legal told the survey: “Senior Solicitors will leave as wages don’t increase and there are limited opportunities for promotion, thus we suffer from a loss of knowledge and experience.”
It was suggested that offering roles on a career-graded basis – whereby lawyers can move up within their pay bands based on performance – could be one way of partially addressing this issue, as could ‘market supplements’ or other additional financial inducements to recognise those disciplines where technical skills are scarce. But the problem is a structural one with local pay grades that does not look likely to be resolved any time soon.
“If you want a good, experienced contracts or planning lawyer – exactly the type that are just getting taken straight into the private sector at the moment,” Quentin Baker told delegates. “They will offer a deal that’s better in terms of finances but more importantly, we found, is that they don’t have to manage anyone in order to pay them more. In order to get paid more in a local authority context, you have to manage people and a lot of good lawyers don’t want to do that. They want to spend time being good lawyers because that’s what they have trained for and that’s what they enjoy.”
Sharing the load
Baker, one of whose past roles was as head of LGSS Law, the shared service and ABS involving Northamptonshire, Cambridgeshire and Central Bedfordshire councils, also pointed out that, by virtue of their size, shared services were often better placed to provide the career paths that many lawyers want.
“The critical mass of a legal team is fundamental,” he said. “They can provide resilience, specialism and career opportunities. Having worked in smaller legal teams and a very big legal team and managed them, it’s just one of the biggest factors you can improve. Because what we are trying to provide is a really broad range of services and it’s very, very difficult to do it well with 15 people.”
Yet while, as the survey shows (see The Productivity Puzzle, p4), most of those heads of legal that had experience of working in a shared service were positive about the experience, developments in this respect seem to have stalled. Few new shared arrangements have been created recently and a number have parted ways. Politics is one factor, as is the feeling that one party is getting the better end of the deal (which given the complexity of local government finance is difficult to disprove).
Concerns were also expressed at the roundtable that they risk amplifying the distance between local government lawyers and their clients. “My team has worked really hard to be part of the council rather than being legal in its ‘ivory tower’ and I would worry that you lose some of that,” said one head of legal.
There was also a feeling amongst some that the high water mark for shared services has been reached as the bottom of the cuts to local government funding is (for now at least) in sight and that as lawyers become more confident about their positions within their councils, in-house is the best place to be.
“I think the arguments for them are entirely correct and logical and I couldn’t disagree with it,” Staffordshire’s John Tradewell said. “But looking at the results [of the survey], you sense that lawyers in local government are getting confident again about their position in their authorities. I think they can probably see the future where they don’t necessarily need to and maybe it’s about focusing on those things that we’re best at doing as in-house teams – such as childcare work, commercial or property – and then maybe using other partners to do the kind of work on top of that. But it doesn’t feel as if shared services now are the answer to any of my particular problems.”
End of the road for ABSs?
Of the legal departments that have achieved ABS status in the past few years, only two – LGSS Law and Invicta Law – have gone the whole hog and set themselves up as separate entities to their host authorities. Others, such as HB Public Law and ELS (the in house service of Essex County Council), only utilise their ABSs when required to for regulatory reasons and their staff remain council employees.
The primary advantage of spinning off from the local authority is freedom from council-imposed pay scales and some of the internal politics (big and small ‘p’) that beset some shared service operations.
However, according to the survey, very few look set to join them, primarily because most departments do not have the capacity to take on much additional external work. Whilst the provision of legal services between authorities – and between authorities and other bodies such as schools – continues on an ad hoc basis, the predicted boom in the inter-authority trading of legal services has failed to arrive. Like shared services, the principle is a good one, but getting it going at a time when many legal departments are struggling to keep up with their own work has proved insurmountable.
“It did feel as if it was going to be a big thing for us a few years ago but the reality is we’re probably doing about the same amount of intra-authority training as we always have done,” said one delegate. “We are still, by and large, doing most of our work for the authority and I think perhaps coming to the recognition that’s where our bread is buttered and we need to make sure we satisfy the authority rather than worrying about others.”
The recent focus for many local authorities instead has been how to best cope with growing volumes of work from their own councils and in this respect, both the survey respondents and the roundtable delegates have detected a change in attitude towards – and approach from – private practice. Whereas in past versions of the survey, many heads of legal were determined to use private practice as little as possible, this year law firms have been identified as the single biggest way that local authorities could cope with their overloads and the rhetoric in the survey comments about not wasting public money on external lawyers seems to have ebbed away.
“It feels less competitive now for some reason,” said one roundtable delegate. “It feels as if we both have kind of come to terms with what our roles are in supporting local authorities with their legal work. We’re very comfortable using them when we’ve something that we don’t have available ourselves. I think the relationship is probably better than it has been in recent years.”
This is in part because the terms of engagement between departments and private practice have become more sophisticated in recent years. Some, such as Croydon with Browne Jacobson, have opted for a single supplier model, while some of the regionally-based consortia – such as EM LawShare or the North West Legal Consortium – have settled on relatively small panels of law firms to ensure that they obtain greater value – both financial and ‘added’ – from the law firms they use.
Sam McGinty, the Head of Legal Services of Loughborough University and board member of EM LawShare, told the session that the consortium’s experience was that ‘less is more’ when working with law firms. By limiting the size of EM LawShare’s panel (currently just seven firms), those firms that do make it onto the panel are more willing and able to invest in and deepen their relationships with consortium members.
“I think the ability to have external firms of lawyers that you can treat as an extension to your team – and who clients can see as an extension to your team – has lots of benefits,” he said. This extends to assistance from law firms with recruitment, secondments, shared training contracts and enabling external lawyers to take instructions from and work with clients directly.
“They know our business well enough that I can trust them to have direct client conversations when I’m not there. Building that more trusted relationship helps you get more value from them and their willingness to do more things for you increases. I don’t know that we would have necessarily got that level of engagement a few years ago.”
Heads on the block?
Improving efficiency through the use of legal technology would seem like an obvious way to square the circle of rising demand and a lack of available lawyers. Yet the survey of heads of legal showed that spending on legal technology is not set to rise markedly in the foreseeable future, with just 2% predicting a substantial (that is 10%+) increase in their legal technology budgets.
There are a number of reasons for this – budgetary issues, compatibility with council IT infrastructures and a lack of bespoke products for local government in some areas to name just some. “It’s the added security layers and the fact that things don’t mash together particularly well when you’ve got a case management system and that’s the frustration,” said one delegate.
This latter problem can be solved to some extent by using apps that operate in the cloud (i.e. remotely via the internet) rather than being installed within councils’ own IT infrastructures where compatibility issues can occur (although it was noted that in some departments, moving to cloud-based applications can also move the budget responsibility from IT to legal too).
But the biggest barrier seems to be coming up with a demonstrable way of showing how the adoption of legal technology can provide a return on the investment required within a reasonable timeframe. Sean O’Connell, the vice-president for marketing at legal technology provider CaseLines, suggested to delegates that the vendors and producers of specialist software should always be asked to help make the case for IT investment.
“We absolutely can and we will always help with ROI,” he said. “We’ve got plenty of data for the implementations we do and vendors will work with you to understand exactly what you’re doing and use the data points that we have from previous experience to help you to make that cost justification.”
A further reason for low levels of investment in legal technology is that the utilisation of the legal technology that local authorities do have has not always been the most effective, which does not always engender confidence in further investments in IT. To this end, Waltham Forest council has appointed a legal technology officer (with an IT background) to ensure that the council’s legal team is getting the most out of the technology that it has and build a case for further investments in legal IT.
“For us it’s about having the resource to look at what is emerging and see what we could use and to make a business case to invest in it,” the council’s legal director Mark Hynes told delegates. “One of the drivers for this is recapturing some of the work that currently goes out by improving your workflows and becoming more efficient.”
Looking further ahead, it was suggested that local authority legal departments need to keep themselves aware of developments in legal technology and in particular, the applications of artificial intelligence (AI) and blockchain on legal practice. While some of the claims for AI in the legal sector are somewhat exaggerated, there is little doubt that it will affect key areas of legal practice in years to come and legal teams may find they need to embrace and utilise these technologies if they are not be consumed by them.
“I think that legal services has got a particular challenge over the next five years,” Hynes said. “Blockchain is something that I can’t pretend I still really understand but it is a reality fast approaching. The Land Registry, for example, are currently looking at putting all their digital records on Blockchain. It could pretty much overnight get rid of the need for a conveyancing lawyer because once the title has been put on the blockchain application there’s no more need to ever investigate title.”
“More and more of these applications will come to fruition, the big areas are around procurement, contracts, management and conveyancing. Blockchain is held back a bit because of the uncertainty around things like Bitcoin but that’s a very small part of it. Estonia already uses Blockchain to run all of their elections. It is going to be a big player.”
This article appeared in the Legal Department of the Future report, published in November 2019. To read or download the full report, please click on the following link: http://www.localgovernmentlawyer.co.uk/legal-dept-of-the-future