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Local Authority Legal Departments Providing Services To External Bodies

Posted on January 26, 2019 in Uncategorized

For very many years, local authority legal departments were seen as very high status among the different units and departments of the authority, and town clerks held a position of power. One report notes that when their town clerk Sir George Ogden entered the committee room in Leicester, the councillors would all rise to their feet. Sir George would tell them what they had to do and then leave the room, since he was far too important to listen to their discussion.

However, a change began in 1988 with the Local Government Act. This introduced CCT – Compulsory Competitive Tendering – and began with manual services such as grounds maintenance, refuse collection, building cleaning, and so on, until 1993 when it spread to other departments including the legal department. This brought many benefits in the way of efficiency of services and economy, but the reverence in which the legal department was held began to diminish. There became less and less top table corporate legal adviser positions and rather more positions of Head of Legal Services at a lower level. Politicians began to question the relevance of what were now seen as backroom legal bureaucrats which were not fertile voter ground, as opposed to frontline services which were.

For some years, the legal department was tolerated as a necessary but aggravating expense, but now local politicians are expecting the legal department not only to cover their own overheads, but to raise additional cash for the local authority, and there is only one way to do that and that is to sell legal services externally.

One of the ways in which this can be done is via the Local Authorities (Goods and Services) Act 1970. This permits a local authority to provide administrative, technical, or professional services to any other local authority or public body specified by ministerial order and charge a fee for doing so if they wish. Many local authorities have used this Act to good extent in order to boost their budgets, and a classic example is Kent County council whose executive Geoff Wild wrote the following in the Law Society Gazette in August 2012:

“Kent County Council Legal Services has built up a thriving external practice based on providing high-quality, low-cost legal services to local authorities and public sector bodies across the country, which now accounts for more than 25% of its overall income and generates 1.5m a year. . . To achieve this, Kent has primarily used the powers contained in section 1 of the Local Authorities (Goods and Services) Act 1970 to make agreements and trade with other public bodies for the supply of legal services.”

Nice money if you can get it. However, following the Local Government Act of 2003 and the Localism Act 2011, it is now possible for local authority legal departments to extend the scope of their external activities beyond other local authorities and public bodies into the private sector. However, in order to comply with regulations, this has to be through a company or other corporate medium and in order to achieve this, many authorities have formed an ABS – Alternative Business Structure – which has to be licensed by the Solicitors Regulation Authority.

Obviously, the main business of a local authority legal department should be to provide legal services to its’ employing authority, and traditionally the authority would allocate it an annual budget. However, following CCT, many legal departments changed over to a zero budget and billed the various departments for services as they were provided. Today, even though austerity has officially ended according to the recent Budget, many authorities expect their legal departments to contribute to their coffers.

Many local authority legal departments are now using a local authority legal case management system which can make considerable savings in terms of manpower and increases efficiency. All the files relating to a case are in one place and can be easily accessed by everyone concerned with it rather than chasing around after specific emails or documents. Court bundling and documentation can be done electronically, saving time and costs. Time recording is made simple, and a local authority legal case management system can also allow for digital dictation on the go from a mobile phone or tablet, making even further savings of time and costs.