The watchdog’s director of legal services Huw Brooker currently hands work to firms on a case-by-case basis but is looking to draw up a roster that will be in place for a four-year period.
He said the introduction of the panel would allow it greater flexibility in securing legal support.
“We’re introducing the legal panel to make sure we have the right legal support to deliver Ofwat’s strategy,” said Brooker.
“We have an excellent in-house team of legal experts. But this process will allow us to call on extra resources, skills and experience. It gives us more flexibility in bringing in legal support when we need it.”
The focus of the legal work firms will be bidding for is projects relating to water regulation and competition.
The first round of the tender closes at the beginning of December.