11 October 2004
According to a City partner with a strong public sector practice, the key issue for public sector lawyers is partnering with law firms. “It doesn’t happen enough, in my opinion,” he argues. But he would say that, wouldn’t he?
A major survey sent to 170 local authorities by The Lawyer suggests that the partner is correct about the low levels of partnering arrangements. The deals between public and private sectors, part of the Government’s drive for best value, is closely linked to the perennially thorny issue of resources. For public sector in-house legal teams, one of the key benefits derived from teaming up with a law firm in some format, whether formal or informal, is the greater access to training and resources it provides. The law firm hopes to be better placed to win work, although it should also lead to a better understanding of potential public sector clients. As Malcolm Iley, public sector partner at Trowers & Hamlins, puts it: “Partnership will enhance our ability to serve the public sector.”.
But the survey results suggest that the practice is far from common; indeed, it would appear to be nowhere near the top of the list of local government lawyers’ key issues. Few in-house teams at local authorities (the subjects of the questionnaire) have partnered with a law firm and even fewer are looking to make this happen in the
Partnering for some
The Lawyer quizzed local government lawyers from the Isle of Wight to the Orkney Islands on a range of issues, with a particular focus on partnering. It found that 71 per cent of respondents said they were not currently involved in a formal partnering agreement with one or more of their external law firms. When asked whether their authority had plans to form an arrangement of this kind, the number saying “no” rose to 94 per cent.
David Corry, county solicitor at Somerset County Council, says he is surprised by the results. “There’s clearly a benefit to be obtained by the way the public sector works with the private sector,” he argues. “I can understand local authorities saying they’d prefer to keep work in-house because of the expertise they have and the ability to add value to the client, be that the education department or property department or whatever, but when you have areas where you may not have in-house expertise, you have to go out. And it makes sense to have a relationship of some description with one or more external firm so that you don’t have to start fresh every time.”
Despite Corry’s positive noises, the fact remains that few of the authorities surveyed (which include London boroughs, county councils and metropolitan authorities) were actively involved in formal or informal partnering arrangements with external law firms. Indeed, 88 per cent say their local authority has never entered into partnering agreements, and an even smaller number (6 per cent) say they plan to do this.
“I’m not really surprised,” says Murray Andrews at Monmouthshire County Council. “But then we’re the third-smallest authority in Wales and the impression I have, rightly or wrongly, is that partnering is more appropriate for larger authorities.”
Some three years ago Monmouthshire did examine the possibility of partnering with a national firm. Andrews says the impression he gained was that his team did not have enough to offer the firm, although as he remembers, “they had plenty to offer us”. He adds: “By partnering, I think of an arrangement whereby both parties get something out of it. We could get training in private sector work, but unless they wanted training in public sector specialisms there wasn’t much else other than offering them work, and as we’re so small we didn’t really have much. We haven’t been courted by anybody else since.”
Andrews’ opinion is echoed by Philip Thomson, head of law and administration at Essex County Council. “I’m not surprised that many don’t have formal agreements, because lots of authorities are small and it would be difficult to partner on their own,” he says. In contrast, the larger Essex County Council, which boasts a legal department of 140, including around 40 lawyers, has a formal partnership with Nabarro Nathanson.
One local authority that has been courted by firms, and succumbed to the advances, is Stirling Council. A few years ago, when the council was embarking on a number of major projects, the in-house team realised it needed some external help. Previously, according to corporate governance manager Peter Broadfoot, the council’s in-house team had sourced external lawyers on an ad hoc basis, using a range of providers. “We decided to try to put it all in one bag and see what we could get back,” he recalls.
Broadfoot, whose team has a partnering agreement with Dundas & Wilson, was more than satisfied with the results. “In terms of having people you can trust and letting them get on with the work, or that you can work alongside, the agreement has worked extremely well,” he says. “Also it’s been good because we’ve worked on an exchange of trainee solicitors as well. Every six months we swap each of our trainees. This lets them see a different culture and all benefit. We’ve both enjoyed this. I’m surprised more haven’t gone for the formal partnering approach because I’ve seen the benefits, which are self-evident. The external body working with you can really lift the pressure.”
However, the size of the authority is no guarantee that it will need or want to go down the partnership route. As Alison Lowton, director of law and administration at the London Borough of Camden, says: “We’ve never done it because it’s never been clear to me what local government gets out of it, although it’s very clear what the law firms get out of it. We’ve had preliminary discussions with firms, but the firms that want to do it tend to be at the pricier end of the market, the Eversheds and Nabarro Nathansons of this world. These firms are not going into partnership with local government on a pro bono basis, after all.”
PFIs need more lawyers
The benefits of partnering are clear for some, though, at least. A good arrangement should help both sides understand each other’s business, which should help them work better together. But there is clearly resistance in the public sector to forming these agreements, a fact highlighted by The Lawyer’s survey. “It doesn’t surprise me that many [authorities] do not have formal partnering agreements, because I think they’re quite complicated to set up and it can be difficult to identify any real benefits from them,” says John Tradewell, council solicitor at Halton Borough Council. “The complexity outweighs the tangible benefits.”
Tradewell’s 22-strong legal department is involved in the Mersey Crossing project, a proposed new bridge costing an estimated £300m. It has instructed Herbert Smith to advise on planning and construction procurement. “We’d outsource again if we had something else similarly big,” says Tradewell. “But generally we’re adequately resourced for the work we have to do and we aren’t particularly complaining about being understaffed. The level is adequate, and by and large we have no great problems with vacancies. Consequently we have no formal or informal arrangements with law firms.”
Indeed, the survey confirmed that it tends to be primarily for major projects that local government lawyers look to external law firms. PFI unsurprisingly headed the list by some distance, although perhaps equally surprisingly employment was second, followed by company and then real estate.
The length of time PFI projects generally take means it is unlikely that in-house teams would have the resources necessary to handle them themselves, and they are even less likely to have the required specialist knowledge. Some of the larger authorities were found to have in-house PFI expertise, but this is rare.
“We try to do everything in-house, but it’s not always feasible to have our team deal with certain issues relating to companies, tax, banking, finance, which are the kinds of things PFI has attached,” says Thomson at Essex County Council. The Lawyer’s survey confirmed, however, that an enormous range of work is handled in-house. Indeed, this was cited by many respondents as among the most attractive reasons for lawyers to choose the public over the private sector.
A wide range of work
Most local authorities also sell themselves on the range of work they can offer. Most operate distinct teams handling a variety of work.
For example, Wrexham Unitary Authority has a 16-strong legal team that includes 11 solicitors and five legal assistants, which includes several fully qualified legal executives. It operates three groups: personal services (which covers social services, leisure, education and housing issues such as tenancy, antisocial behaviour and so on); common law and environmental services (litigation, licensing, public protection); and property and development services (conveyancing, highways, contracts, landlord and tenant). The litigation handled across those three groups includes planning inquiries, licensing, prosecutions, antisocial behaviour orders (Asbos), possessions, judicial reviews and employment.
Fitting the profile of the local authorities surveyed, Wrexham is currently working on a major PFI project with Eversheds. It also uses Thomas Andrews & Partners, DLA and Kent Jones & Done on an ad hoc basis. It currently does not operate any partnerships with firms in the strictest sense, but head of legal Trevor Coxon admits that he is looking into it very seriously. “You can’t afford to be inflexible in local government law, and partnerships can be a two-way street in that they can benefit both private practice and the local authority. Also, we could be interested in forming partnerships or alliances with neighbouring local authorities,” he says.
The greater critical mass that could be achieved via local authorities banding together makes this approach a likely next step in the move towards greater affinity between public and private sector lawyers. Law firms will be watching closely.
Culture and recruitment
In addition to quizzing your local government lawyers about partnering, The Lawyer’s public sector survey also revealed the extent to which cultural issues are a factor in recruitment and retention. “It is a factor,” says Somerset’s Corry. “The ethos of public sector life is often particularly noticeable in young lawyers. They specifically say they’re interested in working in the public sector. From our point of view, we want someone who can do the job. But what we do find with people is being in public sector is very important, particularly for the late 20s and early 30s. The key thing is that people are impressed by the variety of property work available in-house in local government. They’re not all day, every day doing mortgages.”
Inevitably the culture, the range of work and the feeling that one is genuinely providing a service are crucial factors in attracting younger lawyers to the public sector, offsetting the significantly lower salaries available. Salary bands may depend on other factors, including levels of responsibility, but a top lawyer in a county council will be looking to earn between £60,000 and £100,000. It hardly compares with many in private practice. As Stirling’s Broadfoot says: “The sort of people who work in local government are there through a conscious choice. They want to do the work there and can see the wider benefit. Unlike the private sector, we’re not concerned so much with money, but with the community. We do have
a public service ethos and it’s very important.”
Halton’s Tradewell agreed. “It’s very important. Lawyers in local government enjoy the fact that they’re working for an organisation for the public benefit,” he explains. “They take pride in this ethos, and generally the culture in local government is supportive. Local authorities value staff highly, as they understand the work-life balance, and this is attractive for lawyers, sometimes outweighing the benefits they would get in private practice.”
The survey results backed up this view, with the vast majority of respondents saying public sector culture was either a very important factor in recruiting and retaining lawyers (52 per cent), or fairly important (29 per cent). Only 14 per cent said it was either not very or not at all important. The importance placed on the work-life balance issues also featured strongly. A whole range of issues were cited as important in attracting and retaining lawyers in the local government, with flexible working topping the list.
Additional reporting by Jodi Bartle and Ben Mitchell