The Australian Financial Review, 01 June 2012
The federal government’s new system for major agencies and departments to hire external law firms will begin today in an effort to curb a growing legal bill worth hundreds of millions of dollars a year.
Sixty-eight firms have been told they have won a place on a new whole-of-government, multi-use list that will replace inefficient and costly individual agency legal services panel arrangements.
Those firms include the large national firms that have traditionally taken the lion’s share of government spend on external lawyers, which in the 2010-11 financial year was $281.6 million for major agencies and departments. Just 10 firms received 89 per cent, or $250.6 million, of that money.
Federal Attorney-General Nicola Roxon said the list would allow agencies to access a “single streamlined list” that would help reduce costs.
“Streamlining how the Australian government as a whole purchases legal services means we will get more bang for our buck,” she said.
“These changes will mean the Australian government can make more co-ordinated, cost-efficient and strategic decisions when purchasing external legal services.”
The new list has been split into four categories. Government and administrative law has 38 firms, corporate and commercial law has 56, dispute resolution and litigation has 60 and all other legal services are covered by 10 firms. Many firms are listed across a number of categories and some sit in sub-categories such as employment and industrial relations, property and environment law.
Six of the top 10 government-revenue earning firms for 2010-11 have a place in all four categories. They are Ashurst, Australian Government Solicitor, Clayton Utz, DLA Piper, Minter Ellison and Sparke Helmore.
But these firms will now be exposed to increased competition from cheaper mid-tier and boutique rivals. Legal services businesses that specialise in offering lawyers to clients on a casual basis, such as Allygroup, will also vie for government work under the new list.
There is a concern that large agencies with existing relationships with national firms may continue to brief them rather than experiment with new firms. Agencies are allowed to use existing panel arrangements until June next year. Alan Bradbury, partner of small Canberra firm and new entrant to the list, Williams Love & Nicol, said he was optimistic the new system would give his firm access to more government work.
“They have gone to all the trouble that they have gone through to set up the list,” he said. “I am hopeful that agencies will live up to what was intended.”
A second round of applications to join the new list will be held later in the year, with a deadline of September 4.