Kent in-housers seek to cut £3m of legal costs by 2014
The legal team at Kent County Council (KCC) has launched a programme aimed at cutting legal costs by £3m before April 2014.
Geoff Wild
The six-pronged programme, dubbed the ’Evolution’ project, is expected to save the council £1m in legal fees by the end of this year and £3m within two years.
The team plans to introduce a training programme and consultation service with the aim of reducing the amount of internal legal work it does, allowing it to increase its focus on external work.
“At the moment we have an 80/20 internal/external split in legal work,” said KCC’s legal chief Geoff Wild. “We want to move that to 60/40. By doing that we not only reduce costs to Kent but also increase our profitability.”
Overhead costs are expected to drop by £200,000 within the first 12 months of the project, starting with the launch of a new case management system that is expected to significantly reduce the costs of manually processing documents from July this year.
Training is another area where KCC expects to make savings. Having piloted a training scheme for its lawyers last year, the legal team expects to save £50,000 a year by moving its training in-house on a permanent basis.
Lawyers in the middle of their careers, however, might not benefit from the changes, said Wild, adding that a consequence of the changes could be an “hourglass recruitment model” in the future.
“The focus will be on retaining and recruiting the best senior lawyers while attracting bright junior lawyers,” added Wild. “This hourglass model may result in a pinch in the middle.”
The project marks a permanent shift in strategy for the legal team, which is also looking into the prospect of launching an ABS later this year.
“This is far more than a theoretical, salami-slicing exercise or a corporate comb-over,” said Wild of the overall project.
The six strands of the project are:
- Challenging overheads and actively reducing them
- Introducing technology to improve performance and reduce cost
- Critically examining our relationship with KCC and how we can help colleagues to reduce legal risk and cost
- Looking at the appropriate vehicles for the provision of our services, including the exploration of Alternative Business Structures
- Ensuring that legal services meets KCC’s needs now and is prepared to meet those of the future
- Embracing and delivering new and different ways of working
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Readers' comments (20)
Anonymous | 3-May-2012 7:11 pm
Anon 2 May, 8:35pm - I disagree and believe your argument is flawed.
The best way to drive down the costs of the public sector is to out-source its functions to cheaper alternatives. This model, though well meaning is the state extending its functions and deliberately distorting the market.
The perception is that KCC operating on a nod-wink basis with this spin out. It not only is a breach of the state aids rules, but violates the procurement principles.
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Paul Tisdale | 4-May-2012 6:33 pm
The way state aids (sic) is rferred to makes it sound like an illness. If state aid is defined as an advantage conferred on a selective basis to undertakings by public authorities to ensure that government interventions do not distort competition and trade inside the EU, then it is hard to see what state aid is being given or conferred here. Also, as nothing is being procured, then it is difficult to see what procurement principles are violated.
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Norman Purlieu | 5-May-2012 8:08 pm
In addition to the state aid issue KLS also appear to be in breach of the Teckal exemption. Have they ever furnished a satisfactory explanation of how they meet the Teckal criteria?
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paul tisdale | 8-May-2012 6:30 pm
Teckal is not engaged since KCC is not using the ABS for any of its legal services and not procuring anything from it. Those will continue to be supplied by the in-house team.
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Anonymous | 9-May-2012 9:48 am
Paul,
I suggest you read this article on Kent County Council's legal strategy from March 2011, http://www.thelawyer.com/competition-kent-county-council/1007295.article.
Not only does Geoff Wild confirm that Kent does apply Teckal for some of its external services he also undermines his best state aids argument (that there is no distortion on trade in other member states) by listing several international law firms that will be disadvantaged by this measure.
I hope everything has been done correctly, but I fear that Kent County Council could learn from the story of Icarus.
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Anonymous | 9-May-2012 10:50 am
So how do Geldards fit into all this? It looks like they're on a promise to deliver legal services for Kent.
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Paul Tisdale | 9-May-2012 12:19 pm
Interesting reference to an earlier article on Wild. This talks about Teckal in the context of other KCC companies (Kent Top Travel and Kent Top Temps), but not its legal services. Presumably this is because neither Geldards nor the new ABS will be selling their services to Kent, but will target other external clients. No state aid, no procurement, no Teckal. Clever.
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Anonymous | 9-May-2012 12:46 pm
Of course state aid doesn't require the sale of any services. Simply the initial transfer of funding and the Council deciding to act as an undertaking is enough. It doesn't look that clever to me.
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Anonymous | 9-May-2012 1:07 pm
Let's hope that before setting up Kent Top Temps they had read cases C41/90 and C55/95 very very carefully.
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Mr Chinos | 7-Jun-2012 1:52 pm
Sadly this situation underlines just how little expertise there is in state aid within UK law firms.
I'm convinced that if this was a breach of any other kind of EU competition law, several law firms would have already taken action.
As it stands, it is the law firms who are being disadvantaged but it appears they don't have the expertise to resolve the problem. Is it any wonder that public sector organisations are so unwilling to instruct law firms for state aid advice?
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