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Government increases spending on law firms
Government spending on legal services has increased to the 2016–17 financial year, a report from the Office of Legal Services Coordination of the Attorney-General’s department has shown.
Grace Ormsby
The new report provides an overview of legal services expenditure across the Commonwealth, identifying trends and changes to overall spending, and gives insight into the top ten ranked legal service providers receiving Commonwealth legal work.
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The OLSC is responsible for “ensuring that Commonwealth entities receive consistent and well-coordinated legal services that are of a high standard, uphold the public interest, and are sensitive to whole-of-government interests.”
It has reported that over the 2016–17 financial year, agencies paid a total of $306.63 million in professional fees to legal service providers. This is an increase of $16.41 million from the previous year, where a total of $290.22 million was recorded.
Of this amount, the top ten legal service providers to the Commonwealth received approximately 80 per cent of the professional fees.
The Australian Government Solicitor, recently named Dispute Resolution Team of the Year at the Australian Law Awards, was the top ranked legal services provider to the Commonwealth, taking in 35 percent of professional fees over the counted period. This was down three percentage points from previous years.
Clayton Utz ranked second, with 12 percent of fees earned, with Sparke Helmore (eight percent), MinterEllison Lawyers (five percent) and Ashurst (five percent) rounding out the top five.
DLA Piper and King & Wood Mallesons (four percent each), Corrs Chambers Westgarth (three percent), and HWL Ebsworth Lawyers and Mills Oakley Lawyers (two percent each), rounded out the firms named in the top ten.
Vince Sharma, a Mills Oakley partner in Canberra, said the firm is very pleased to be a top ten Commonwealth government adviser for the second year running.
“This outcome demonstrates that there is a clear role for further disruption in the government legal services market and that clients are embracing alternative service delivery models,” he continued.
“We have been particularly focused on responsiveness and adding demonstrable value to the in-house offering – for example, there is the adoption of much greater competition amongst firms with a particular emphasis on collaboration on high risk projects between in-house and external providers.”
For Mr Sharma, “this shows that there will always be a role for private sector legal advice provided that it is delivered in a complementary way to that being undertaken by in-house legal teams”.
Interestingly, the table also showed 20 percent of the professional fees paid out by the Commonwealth did not go to “top ten” Commonwealth fee earners. This is six percentage point jump from the 2015–16 report, where only 14 percent of professional fees were derived from “other” firms.
