Kent Legal Services claims record year as £3.7m pumped back into council

  • Print
  • Comments (24)

Readers' comments (24)

  • How does Geldards fit into all this? I know some of their partners are part of the organisation that includes KCC.

    Unsuitable or offensive? Report this comment

  • Well done to the team at Kent in showing the way forward here. The fact that they can do the work well, turn a 20% net profit and produce efficiency savings too shows what can be achieved in comparison to the use of over-priced (and, in some cases, not particularly specialist) 'public sector' lawyers in private practice.

    It can't be long surely before this model is replicated very widely throughout all local authorities and, where it is not, authority Chief Executives and local taxpayers should be asking very hard questions of their authority heads of legal.

    Unsuitable or offensive? Report this comment

  • How do you make a profit by selling your services to your own employer? Only in the public sector would you get away with categorising it like that.....

    Unsuitable or offensive? Report this comment

  • This is very strange.

    Do they act on legal work for the council? If so then doesn't the council just pay the fees and then the legal outfit just passes it back to the council as "profit".

    Or do they also do external work? If so why is a public authority selling legal services. It actually means there is overcapacity in the legal department and so another way to reduce costs would be to reduce that overcapacity.

    Do they occupy their own offices or their old council offices? If the latter do they pay full market rent for the accommodation?

    Unsuitable or offensive? Report this comment

  • the pressure will start when Kent Council ask Geoff for £4.5 million next year - and so the cycle begins

    Unsuitable or offensive? Report this comment

  • I broadly welcome this. However KCC are claiming to be a state organisation when they pay their staff, but then the staff are being applied to the external law firm. For this to be compatible with EU law, staff time needs to be paid for at a market rate by this company.

    Unsuitable or offensive? Report this comment

  • Local authorities have far, far too many lawyers. They probably have 8-10 times too many. Q

    Unsuitable or offensive? Report this comment

  • Brilliant, they are saving money by selling services to themselves at a profit. Milo Minderbinder would be proud of that one.

    Unsuitable or offensive? Report this comment

  • This is interesting from a powers, European procurement and state aid viewpoint.

    Unsuitable or offensive? Report this comment

  • It would be good if the Lawyer could actually interrogate stories like this instead of recycling the PR. The options here seem to include:

    (a) Win for everyone except private practice lawyers, trebles all round
    (b) Good way of delivering services to the public sector, provided you can navigate conflict and LA governance issues (seems a bit fraught if the director of governance is also responsible for turning a "profit")
    (c) Wide open to a state aid challenge
    (d) [others]

    Unsuitable or offensive? Report this comment

  • "KCC’s legal team run on a zero-budget basis, receiving no internal subsidy and competing for work in the open market."

    Great, so where is all the "open market" work advertised? Seems a bit odd that the legal team site is embedded in the KCC website with no mention of how other law firms quote for work.

    I also note that Legal Services are based in County Hall - I assume they pay KCC market rate for all their offices, utilities etc, including ensuring that they are paying approriate levels of business rates for their office space?

    Unsuitable or offensive? Report this comment

  • The state aid issue would, surely, have been no.1 on the list of matters to consider and resolve before embarking on the venture and will be a question asked by each potential LA client.

    To be honest, though, as a taxpayer I really don't care if a set of LA lawyers provide cheaper legal services to lots of other public sector bodies, thereby freeing up money to be spent on public services rather than lining private sector partners' pockets. And I'm a private sector lawyer

    As someone above commented, trebles all round could be the outcome. Maybe once the journalist in question has done the job properly we might get a fuller story addressing the various obvious points that commentators have raised?

    Unsuitable or offensive? Report this comment

  • In a previous interview in the lawyer, Geoff Wild mentioned that there had been an unsuccessful state aid investigation but didn't provide any details. It would be interesting to know what actually happened, given that this question seems to dog Kent County Council's legal services miracle.

    Unsuitable or offensive? Report this comment

  • I'm bemused that legal experts are online moaning about state aids infringements by a council making large profits. Do these law firms have so few state aids experts that they cannot make a compelling complaint to the European Commission on this issue? It not, why should the public sector instruct these firms?

    Unsuitable or offensive? Report this comment

  • isnt this simply a case of the council saying - we have [10] in house lawyers. they did [1200] hours each last year. at panel charge out rates that would have cost us £3m but in fact as we employed them in house it only cost us £1m. As such, we have made a profit of £2m. Of course - it kind of assumes that it is at all times completely appropriate that all work should be outsourced - which is not really an appropriate assumption.

    Unsuitable or offensive? Report this comment

  • As a number of people have pointed out, they have not "made" money to be put back into Kent. The legal team has simply returned some of the money they charged as fees to the council for the work they did. Kent Legal Services charges the council (i.e. their client) fees as they do not receive any operating budget from the council. The difference (what is described as "profit" here) is simply what is left over when they have done fees minus costs.

    That is not to say that this isn't a good thing. Had the council used external lawyers, the profits would have remained with the law firm. Here, at least, anything above and beyond the running costs of the legal section has been returned to the council. Nevertheless, it is rather disingenuous to us the terms "profit" and "extra cash" (especially as you could claim that this simply indicates they are overcharging the other cost centres in the council in the first place).

    Unsuitable or offensive? Report this comment

  • It has been interesting to read the comments on this article, notable in the main for remaining conveniently anonymous and largely mistaken. There is more than a tinge of the green-eyed monster about many of them. The fact is that by working for over 300 public sector bodies nationwide - in addition to Kent County Council - Kent Legal Services has generated real income and genuine profits of over £11m over 10 years, with no state aid, no internal subsidy, no guaranteed work and all its costs above the line.

    Unsuitable or offensive? Report this comment

  • So if the previous posting is correct that means KCC legal services are taking council taxpayers' money from "over 300" (that's narly all English local authorities then) public bodies. So we are all subsidising Kent residents' council tax???

    Unsuitable or offensive? Report this comment

  • No. It means they are saving council-tax payers millions of pounds that would otherwise go to the private sector, who would charge significantly more than Kent.

    Unsuitable or offensive? Report this comment

  • Anon 11:42, 22 August

    All people want to know is what structure is being used. Then the public can make an informed decision about the state aid compliance of the Kent County Council legal services model.

    If there genuinely is no subsidy this should not be a problem. After all, the intellectual property in developing the model came from people paid for from the public purse.

    It's a bit rich of you to say that others are "conveniently anonymous" when you have chosen not to tell us who you are. Kent County Council or Geldards by any chance?

    Unsuitable or offensive? Report this comment

  • To Anonymous | 22-Aug-2013 11:42 am - your comment is rather rich and hypocritical when you yourself are hiding behind anonymity. I rather suspect that you are some kind of Kent insider trying to ensure this is spun correctly.

    I don't think that most of the comments here are based on jealously at all. People simply want to get to the straightforward truth: "profit" from your internal client is not profit at all. If all that £2.4 m profit is generated from your external clients, then hats off and well done - that is undoubtedly a good outcome for Kent rate-payers. Equally it is far better for Kent residents for legal spend to go to in-house lawyers and then be recycled back into the council rather than be lost to private practice firms.

    However from the rumours on the grapevine, the proportion of the profit from external clients is minimal. And the fact that this article (which really just reads as a Geoff Wild authorised press release) completely fails to distinguish between internal and external income rather backs up these rumours. More direct honesty and less misleading spin would show if Kent Legal Services genuinely deserve congratulations or whether this is yet another example of Geoff Wild's ability to somehow get the legal media to reprint his own nonsense.

    Unsuitable or offensive? Report this comment

  • I think people deserve to know how this structure is compliant, otherwise public money is being put at risk.

    From what I've seen I think that KCC has employed too many staff to efficiently provide legal services to just Kent County Council. The salaries of the additional staff constitute a transfer of state resources. As long as KCC offer their services to the market they are an undertaking.

    Unsuitable or offensive? Report this comment

  • I have only just seen this article and these "profit" figures released are quite strange. I would like to see a listed company traing to book a "profit" on its balance sheet for money paid to ist inhouse legal team and subsequently returned. Its auditors would have something to say about this.

    Kent County Council pays Kent Legal Services £12m.
    Kent Legal Services return £2.42m of the £12m to Kent County Council.
    Kent County Council makes £3.7m profit!

    This is some accounting straight out of Soviet Russia.

    Unsuitable or offensive? Report this comment

  • The same questions surely apply to NNT Law. A law firm operating from the offices of Newcastle City Council, whose indemnity insurance comes from the Council and whose staff work at the Council.

    Curiously the Council claims they have too few lawyers to meet their core needs, but is able to rent staff out to local businesses.

    Unsuitable or offensive? Report this comment

Have your say

Mandatory Required Fields

Mandatory

Comments that are in breach or potential breach of our terms and conditions in particular clause 8, may not be published or, if published, may subsequently be taken down. In addition we may remove any comment where a complaint is made in respect of it. These actions are at our sole discretion.

  • Print
  • Comments (24)