Legal Department of the Future: The stories behind the statistics
As someone who has spent more than 30 years of a legal career working with local authority in-house teams, the statistics contained in the Legal Department of the Future report ring true, writes Charles Ward. But behind every statistic, there is a story, which he now explains from his own experience and discussions with others.
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It is not about being cheap and cheerful.
Providing ‘more for less’ requires an understanding of what a corporate client really wants from an in-house legal service. It is not about being cheap and cheerful. If that were the case, no legal work would ever be outsourced. A corporate client wants value for money. But not only value for money. They also want a quality service which lifts the burden from their own shoulders and provides a timely turnaround. And a corporate client is prepared to pay more for that type of service. For me, the benchmark comparison for a good in-house team should be that which the client could obtain from a private sector firm of equivalent size, expertise and resource. What is also important to a corporate client is the added value which only an in-house legal team can provide. An on-site presence. An understanding of the client’s ‘business’. Making yourself part of the client ‘team’. Presenting to elected members. Navigating the council's constitution. Dealing with those tiresome freedom of Information requests and registration of assets of community value.
It's about the technology
For me, having the right technology and systems in place are key to providing a client with more for less. Because it is that technology and the systems which go with it, which creates the environment in which fee earners are able to work quickly and efficiently and which, in turn, produces lower unit cost. A problem for legal services managers is that many of these systems are not under their direct control. All they can do is report a failure and wait for someone else to come and fix it. Walking up and down looking for a printer that works and then lining up behind two other fee earners, is hardly an efficient use of lawyer time. Some of that technology is already free to download and use on any modern computer, such as voice dictation.
I’ve noticed that local authority legal teams always appear several years behind their private sector counterparts when it comes to adopting new technology. Whilst there may be exceptions, I would think it safe to assume that most local authorities have not yet adopted the electronic signing and attestation of documents which is now the standard in most private practice. The adoption of such systems is not expensive and saves money as well as time. Using DocuSign not only avoids the need for a corporate seal and a wet ink signature, it also avoids the need to prepare and circulate hard copy engrossments and can bring forward a completion by more than a week.
Staff recruitment and retention
Whilst salary levels for local authority lawyers are significantly lower than those working in private practice, what must be factored in is the Local Government Pension Scheme. Whilst this final salary scheme may no longer be as generous as it once was, it is still better than anything you are likely to get elsewhere.
Headline locum hourly pay rates may be higher than the equivalent salaries paid to permanent staff but remember that from that hourly headline rate, anyone working off payroll has to fund the costs of their own employment, before any money can go into their pocket. This will include employers’ National Insurance, rolled up holiday pay, and making their own pension arrangements. Any tax advantages which staff might once have enjoyed from working off-payroll disappeared with IR35. So maybe the pay difference is not as significant as it first appears. Even the 15% commission paid to the locum agency is not money for nothing, as it covers the administration and due diligence which would otherwise have to be carried out by the council's own HR and payroll teams.
By contrast, the locum market enables legal services managers to quickly upsize or downsize to meet day-to-day operational requirements without the paraphernalia of a long-winded recruitment or redundancy process. For a good locum, the issue is not how long a particular assignment lasts but whether there will be something to move on to after it has ended. It is about personal marketability. The ability to quickly adapt to a team's requirements and make a real contribution to getting the work done. The first thing I notice when looking at a locum CV is the length of previous assignments and, more importantly, whether any of those previous assignments have been repeated or extended. If the answer is ‘none’, that for me sends its own message. When it comes to ‘diva tendencies’, the worst locums I have come across are the semi-retired grandees. The former chief executives coming new to transactional work but who refuse to be told.
Retention of good staff has always been a problem for me, much more than the permanent recruitment of new staff. I believe it’s because of the limited opportunities which local authorities provide for internal promotion, where every opportunity has to be advertised to the World and where even the best candidate can be pipped at the post by someone who may be less able but whose answers score better in a structured interview. Then, the only way for that internal candidate to achieve promotion is to adopt a scatter gun approach, by sending multiple applications to other local authorities until someone bites. A system which is hardly conducive to corporate loyalty.
Getting into management.
I found it disappointing that only 38% of local government lawyers aspire to management, even though leadership is a valuable life-skill which can only be learned by doing. Management is your chance to make a difference. To put in place the changes you always wanted to make but never had the seniority to make. A chance to experiment with your own ideas instead of implementing someone else's. Taking credit when something goes well and responsibility when it does not. Something I have always tried to do when taking up a new management role is to repair some of those client relationships which had previously become soured.
Third party income
Something not mentioned at all during the survey is the opportunities for a legal team to help meet its budget by maximizing third party income. The costs of many transactions can be loaded onto the party receiving the benefit of that transaction. Examples include section 106 planning agreements; highway agreements; statutory lease extensions; leasehold sub-dealings, such as licences to assign or underlet. Licences for alteration or change of use. In fact, any transaction carried out at the request of another party.
Whilst an in-house legal team cannot make a profit on such transactions, it is important they are at least cost-neutral for the local authority. It is about accurately assessing the amount of work likely to be involved and seeking a professional undertaking for that amount. And then being able to work within that quoted budget so that there is no cost overrun.
On a final note, what I have always valued from my work with in-house legal teams is the general culture of courtesy which has always existed between local government officers at every level.
V.Charles Ward is a Senior Property Lawyer with HB Public Law and author of Local Authority Conveyancing: Law and Practice (UK).
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