As the closure of the London Development Agency (LDA) looms closer, speculation is growing as to the future of its three panels of external legal advisers.
The LDA is set to be abolished by 31 March 2012 in response to the Mayor of London’s proposals on devolution, and its functions and assets will be rolled into the Greater London Authority (GLA).
The Lawyer has learnt that the LDA legal team has already been absorbed into the department offering shared legal services to Transport for London (TfL) and the GLA.
This has resulted in uncertainty over the plans for the LDA’s three legal panels, with law firms speculating on whether the rosters will be combined into the GLA list or simply scrapped.
The LDA legal roster currently comprises a City panel that includes Herbert Smith and Hogan Lovells, a commercial panel that includes Burges Salmon, DLA Piper, Eversheds and Stephenson Harwood, and a panel covering smaller matters such as general property that includes Ashfords and Shepherd & Wedderburn.
According to a source close to the panel framework, the LDA legal team has shrunk to just four lawyers following a recent spate of departures, and the in-housers have told their external firms that they moved into the TfL legal department at the end of August.
“It’s all in upheaval and most of the LDA legal team has already moved on,” the source said.
The four in-house lawyers, led by LDA director of law and governance Caroline Moore, is understood to be continuing its work on LDA matters, but this is expected to peter out or be rolled into the GLA by April.
“The work coming out of the panel is already notably reducing or transferring,” the source added.
Moore took over the leadership of the LDA department last year from former head of legal Debbie Adams, who joined from National Air Traffic Services in 2007.
The leadership post has seen a high turnover in recent years, with former head of legal Thelma Stober departing in 2006 to join the GLA and the job lying vacant until Adams’ arrival the following year. Legal head of corporate and commercial Mick Lancaster covered the post in the interim.
The LDA legal department was in the spotlight again in 2009 when Adams and her team slashed 10 firms from the legal roster.
The list of advisers plummeted from 18 to eight, with Berwin Leighton Paisner (BLP), Bevan Brittan, Bircham Dyson Bell, DMH Stallard, Field Fisher Waterhouse, Hammonds (now Squire Sanders Hammonds), LG, Martineau Johnson, Mills & Reeve, Nabarro, Norton Rose, Pinsent Masons, Shoosmiths, Trowers & Hamlins and Wragge & Co all axed.
Adams was under pressure to increase efficiency within the panel and cut £3m from her legal spend at the time of the review, and originally planned to cull the roster to just five firms.
The proposal to amalgamate the LDA legal function into TfL’s shared services was partially formulated as early as 2006, when Howard Carter arrived as head of legal at TfL from the GLA.
Within his first two months in the role he floated the idea of a legal ’supergroup’ combining the legal departments of TfL, the GLA, the LDA, the London Fire and Emergency Planning Authority and the Metropolitan Police.
The idea coincided with Stober’s move from the LDA to the GLA, creating a significant amount of cross-pollination between TfL, the GLA and the LDA.
But Stober’s leadership at the GLA was short-lived after she was injured in London’s 7 July bombings, and Fiona Ledden replaced her as head of legal in 2008, joining from Sutton Council.
Carter’s supergroup proposal was in response to Lord Gershon’s report on public sector efficiency, which called on local authorities and other public bodies to combine services to prevent duplication and achieve efficiencies of scale.
TfL and the GLA have since merged their legal teams and the latest wave of public sector cuts has only amplified calls for legal departments to merge services and find innovative ways to save money.
The next question will be what happens to TfL’s legal roster in its next review, given the legal team’s new responsibility for the LDA and GLA.
Current advisers to TfL include Ashurst, Bird & Bird, BLP, Clifford Chance, Eversheds, Freshfields Bruckhaus Deringer, Herbert Smith, K&L Gates, Manches, Simmons & Simmons, Travers Smith and Wragge & Co.
The panel was last reviewed in 2007, so another review is likely to be imminent, sparking questions as to whether a cost-busting super-panel could be on the cards.