The long-awaited and overdue report - commissioned in March 2009 after a ballooning of government legal costs during the 2007/08 financial year - found that better management from in-house legal departments could help reduce costs, especially through the introduction of a co-ordinated procurement process across all Commonwealth agencies for legal services as well as the development of standards, training and support for in-house practices.

The report also found that in-house legal practices should act to "professionalise" their service delivery and, where appropriate, adopt the practices of larger corporation in order to manage legal services procurement.

It also cited a general lack of attention and strategic direction of legal services management and a lack of reliable data on the demand for, and cost of, legal services across the Commonwealth and found that redefining the role of in-house lawyers in agencies could help.

McClelland said in a statement on Monday that the conclusions of the report were clear, namely that "the current system of agencies individually tendering for legal services is very costly both to the Commonwealth and to external service providers".

In response to the release of the report, Shadow Attorney-General George Brandis SC said that the Rudd Government must still halve its legal expenditure this year to meet a 2007 election promise that $15 million would be cut from the Government's legal expenditure.

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See the full report here