Reshaping government legal services in the public interest

By Gabrielle Appleby

Monday July 6, 2015

On July 1, the Australian Government Solicitor was brought back into the fold of the Attorney-General’s Department having spent one and half decades as an independent statutory agency and Government Business Enterprise. This consolidation was announced in December 2014 as part of the government’s Smaller Government initiative. The purpose of the consolidation was to “reduce overheads from operating a separate bureaucratic structure” while also “strengthen[ing] the flexibility within the department for officers to work across both legal advice and legal policy.”

Following the consolidation, the government has also announced a review of government legal services by Chris Moraitis, secretary of the Attorney-General’s Department, to “identify efficiencies that can be gained in government legal costs”. This was further explained:

“The review will encompass the role of in-house legal practices in Commonwealth departments and agencies, including how in-house advice is organised, to ensure more coordinated and aligned advice to the Government in the future. The review will look to the Commonwealth legal services market as a whole and ultimately seek to deliver the best outcomes for the Government from the full array of legal services available.”

The terms of reference for this review are still being formulated. While there have been some reassurances that there will be consultation with government and private sector stakeholders, there has been no information as to how that will occur.

“As the primary legal services provider to government, the Attorney-General has particular obligations to the public interest and the law that must not be overlooked in the quest for efficiency and cost-effectiveness.”

Across the world governments have struggled with the question of how to best provide legal services to government. Should government departments and agencies employ lawyers in-house? Should departments and agencies have access to private legal services, and, if so, should this be restricted or regulated? Should there be a single, centralised provider of legal services to all government departments and agencies?

The answer to these questions is not easy. Indeed, there has long been recognition that legal services are different in nature from other services provided to government — whether that be engineering, accounting or architecture. Even the influential 1997 Logan Review (The Report of the Review of the Attorney-General’s Legal Practice) noted that, as the primary legal services provider to government, the Attorney-General had particular obligations to the public interest and the law that must not be overlooked in the quest for efficiency and cost-effectiveness.

There are significant benefits that private law firms can offer government. They are often better resourced, staffed by lawyers who have greater specialisation (particularly in commercial areas), and have the ability to respond more quickly when legal advice is sought urgently. In some instances, it is more appropriate for independent statutory authorities to seek the advice of private law firms where their statutory mandate will bring them into direct conflict with the government proper (for example, the Auditor-General or the Ombudsman).

However, as well as concerns about over-servicing and over-charging (value for money issues), private law firms can lack complete knowledge of the department or agency’s functions and legislative responsibilities, the previous position taken and potential whole-of-government implications. There are also concerns that the overly client-centric focus of many private law firms, often exacerbated by the competitive marketplace, means that lawyers are not exercising appropriate professional independence from the demands of the client (in this case, the department or agency).

“If used across government, centralised providers ensure consistency in the government’s legal position and avoid duplication of work.”

Lawyers working for in-house legal practices may have greater potential to influence the actions of the department or agency: involved early in the decision-making continuum and trusted by management as part of the team. In-house legal practices are also able to understand better the client’s objectives than external lawyers brought in for a single transaction. However, in-house lawyers are generally seen as particularly vulnerable to the pressures of the client at the price of upholding their professional ethical obligations to the court and justice. In the government context, in-house lawyers may also be unable to withstand pressure from the individual department or agency to act in its interests, rather than the interests of the government as a whole.

A centralised legal services provider is, in contrast to private law firms or in-house legal practices, generally seen as offering legal services to government that take into account whole-of-government issues. If used across government, centralised providers ensure consistency in the government’s legal position and avoid duplication of work. The separation between the provider and the department or agency can also increase the likelihood that the necessary level of independent professionalism is maintained from the client.

In the last 20 years, the Commonwealth regulatory framework for providing legal services to government has largely been dominated by the goals of efficiency and cost-effectiveness. This has been evident in the government reviews such as the 2009 Report of the Commonwealth Legal Services Procurement (conducted by Anthony Blunn and Sibylle Krieger). The report is predominantly concerned with the streamlining and co-ordination of the procurement of legal services by government agencies. The report described as key to the review “the desire of government to achieve further efficiencies and to maximise value for taxpayers’ money in the procurement of legal services”.

Despite its primary efficiency focus, the report also considered other issues. In regard to the increased use of in-house legal practices by departments and agencies, it found:

“The independence and uncoordinated development of in-house legal practices has been a major factor in the erosion of the role of the Attorney-General as the First Law Officer, and as such, responsible to Cabinet for ensuring the provision of appropriate legal services across the Commonwealth.”

It also identified the rise of in-house legal practices as leading to variation in experience and standards and a failure to recognise the wider interests of the Commonwealth, particularly in relation to the reluctance to share information and advice between agencies.

In response to this review, and others, the government introduced three new initiatives. The first is the Legal Services Multi-use List, to assist departments and agencies in legal services procurement. The Commonwealth has also established two new bodies: a General Counsel Working Group to address “strategic issues facing the Commonwealth legal services market” and the Australian Government Legal Network — an organisation open to all lawyers working in government agencies. Its objectives include “professionalising government in-house practices, creating a support network for government lawyers, further developing the Australian Government’s role as an informed purchaser or legal services and improving the attractiveness of government legal practice through a number of development opportunities.”

The proposed review following the consolidation of AGS back into the Attorney-General’s Department should include an appraisal of these initiatives against their objectives. It should also reassess the dominance of efficiency as the relevant criteria for structuring the government legal services. While value for money is important — and of course takes on a dimension of the public interest because of the expenditure of taxpayers’ funds — it is not the raison d’être of government and should not be the sole focus of the framework for acquiring legal services by government.

This article is drawn from Dr Gabrille Appleby’s paper presented to the Australian Government Lawyers Network Annual Conference in Canberra on June 19, 2015.

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