The age of austerity has seen local authorities’ legal budgets slashed by as much as a third, throwing down a huge challenge for legal heads to keep their departments afloat.
While some have resorted to widespread redundancies and others have merged with fellow councils’ legal teams, Birmingham City Council is the latest legal department to take a more innovative approach to curbing costs.
Following in the footsteps of Kent and Essex county councils, England’s largest local authority has decided to generate its own income by pitching for external work, thereby protecting its team rather than becoming a victim of the cuts.
Assistant director of legal services John Wynn says Birmingham has been ”polishing its act” for the past 15 months and has so far pitched for four contracts in the public sector under the brand of LSB Law (standing for Legal Services Birmingham).
“We’re having to cut our budget by just under 30 per cent over three years and the income this work generates is seen as a way of supporting the delivery of frontline services,” he says.
The legal team’s first successful tender came earlier this month when it won spots on three of the panels of HealthTrust Europe’s new London Procurement Programme, a legal services framework covering around 60 NHS trusts in London, the Midlands and the South of England.
Although two of its other pitches have been rejected, it is now at the shortlist stage of a fourth, for a place on Leeds City Council’s panel of external legal advisers, which is expected to be finalised by November.
Birmingham’s in-house team is one of the largest in the country, with around 230 legal staff, and since former head of legal Mirza Ahmad was made redundant in July the department has been led by interim legal services director David Tatlow and assistant directors Wynn and Jane Robson.
“It’s comparable to a medium-sized private practice, certainly in the Birmingham area, and until 12 months ago we had previously worked with other public authorities on an ad hoc basis, occasionally seconding a member of staff or carrying out work,” Wynn says.
He admits that not all councils’ legal departments are cut out for external work, with some smaller operations lacking the range of skills and specialisations available in Birmingham’s large outfit, but he sees the new source of income as a way of safeguarding and utilising Birmingham’s team of specialist lawyers.
Someone who knows all about the benefits that external work can bring to local authority legal teams is Geoff Wild, head of legal at Kent County Council, which was among the first public sector legal teams to win external work alongside private firms.
Kent’s legal team now spends about a quarter of its time handling outside work, acting for more than 300 public bodies including other councils, emergency and probation services, NHS Trusts and higher education institutions.
Commenting on Birmingham’s appointment and the trend towards more innovation among council legal teams, Wild says: “It indicates a wider interest in the local government community in looking at generating other avenues of income, and it takes quite a lot for local authorities to take that step.
“You need capacity, strength and depth to offer out your services, but for those that have the capacity, and Birmingham certainly does, it’s a good route. There’s no reason why councils such as Birmingham, Essex and Kent can’t compete with private firms and succeed.”
Both Wild and Wynn agree that their legal teams’ ability to offer exceptionally low hourly rates for external panel work poses a challenge for private law firms specialising in public sector work.
Kent, for example, offers a blended hourly rate of just £90 an hour, significantly lower than the rates charged by most private firms.
“We offer this rate to all our clients,” Wild says. “We have frozen it and will hold it as long as we can. The results speak for themselves.”
“We all have to evolve through this period, and that includes the private firms that operate in our sector as well as ourselves,” Wynn says. “With the likes of Wild and ourselves polishing up our act, private firms will need to meet the challenge.”