The Federal Government has granted the national employment regulator a 12-month exemption from the Legal Services Directions 2005.

While Attorney-General Robert McClelland first approved the use of in-house lawyers in 2008 for court matters involving employee underpayments, the approval has now been broadened to allow the FWO's legal team to run all its cases.

In addition, in-house lawyers will be able to conduct enforcement proceedings to recover outstanding court penalties.

The FWO currently has a team of 37 lawyers headed by its Sydney-based chief counsel, Janine Webster.

Formerly the agency's executive director of national litigation, Webster's team comprises a director of legal practice, special counsel, seven principal lawyers, 12 senior lawyers, 16 lawyers and four support staff.

Although she does not intend to use her in-house team for every matter, Webster said it is important for the agency to have the flexibility to do so where appropriate.

"There will always be a need for external firms to conduct some of our work where it is outside our expertise or existing resources don't permit the proper conduct of the matter," said Webster.

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"However, in a specialised environment such as our own, that should be the exception rather than the rule and when we do, we will expect value for money."