Of course, that doesn’t necessarily mean perfectly good.

With the Commonwealth WoAG legal services tender just around the corner (the current panel expires in June 2024), the notion that things happen in threes could signal the perfect storm.

One: the threat of a recession is looming.

Two: the Albanese government has declared a war on outsourcing, slashing the federal government’s spend on external contractors and consultants. In the recruiting, consulting, and technology services markets, for example, the government has reduced its external spend by $2.9 billion from last financial year, according to the Financial Review.

And three: the PwC tax scandal has cast a spotlight on the awarding of government contracts and placed ESG, and governance especially, under the microscope.

Hey, big spender

Government tenders are always fiercely competitive, and for good reason. These opportunities only present themselves every three to five years and can be extremely lucrative.

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In the 2020–21 financial year, the Commonwealth spent $430.84 million on external legal services excluding disbursements, down 1.4 per cent on the previous year, as the Legal Services Expenditure Report 2020–21 denotes.

Of that, the Australian Government Solicitor claimed 30 per cent, or $129.21 million.

Clayton Utz, Sparke Helmore, MinterEllison, Ashurst, King and Wood Mallesons, Norton Rose Fulbright, Maddocks, HWL Ebsworth, and Mills Oakley were the big private sector winners, sharing 51 per cent (or around $219.72 million) of the government pie.

Another 150 external providers shared the remaining 19 per cent ($81.8 million), with the bulk earned by the other 52 providers listed on the Attorney-General’s Matrix of Legal Services Providers.

Source: Legal Services Expenditure Report 2020–21

The WoAG panels, which now fall under the Department of Finance’s purview, are specifically designed to save money and avoid corruption in procurement.

So, while the legal services tender evaluation criteria will certainly give good weight to pricing, it would be foolish to think discounts alone will secure a place on the panel.

The “PwC effect” will be evident. In addition to demonstrating value for money and their credentials as lawyers, firms should also expect to be subjected to intense scrutiny on everything ESG-related, including fraud, bribery and corruption, diversity, conflict management, pro bono performance, gender pay equity, data security, and supply chain management. Moreover, “standard” responses might no longer suffice without accompanying data and other supporting evidence.

A smaller budget for the engagement of external legal services will almost certainly mean a smaller panel. Many incumbent firms will have already started to mobilise resources, given how much is at stake.

The rest should be warned: a storm is brewing.

Jacqueline (Jaci) Burns is the chief marketing officer at Market Expertise.