A spokesman for the regulator argued that a larger pool of firms would increase competition among Ofgem's panel members and therefore ensure that the regulator was getting better value for money.
The spokesman added that Ofgem will put instructions out to tender and will invite panel firms to participate in the process.
Ofgem is aiming to cut its total budget by £2m to £34m in 2004-05, representing a real term reduction of 8 per cent. The spokesman refused to disclose what proportion of this is allocated to legal spend.
As first reported in The Lawyer (31 January), the review followed a period of upheaval at Ofgem following the shock departure of the regulator's general counsel Nicola Northway in February 2005.
Northway left Ofgem after the regulator scrapped the general counsel role, dissolved its central legal team and moved lawyers into five departments created by the then new chief executive Alistair Buchanan. She is now at Barclays. The five new divisions are corporate affairs, corporate strategy, markets, networks and operations.
Ofgem invited 19 firms to participate in the beauty parade, 13 of which submitted tender documents.
The appointments will run until February 2008, although Ofgem has the option to extend this by one more year.