A little less red tape and a bit more quid pro quo needed for Whitehall super panel

No matter what awful name the Government's centralised panel for external legal services is currently going by, complaints about it from those on the roster have for years remained awfully consistent: it's far too unwieldy and work is not handed out evenly. Even so, the latest figures make for startling reading, demonstrating that criticism levelled by panel firms is in many instances justified.

In addition to highlighting the huge discrepancy between what individual firms are receiving from the panel, the data (covered in more depth here) demonstrates the extent to which large City firms have been moving into territory that would previously have been the preserve of smaller London and regional rivals.

So while longstanding Government favourites Field Fisher Waterhouse and Pinsent Masons take the top spots by legal spend when looking at the three financial years starting from 2007-08, Freshfields Bruckhaus Deringer makes it into third place over the period, with the firm topping the spend list for 2009-10 when it took home some 14% (£6.25m) of the £44.8m billed that year.

Looking at the three-year period overall, the trio each billed between £12m and nearly £16m, with Hogan Lovells not far behind on £11.6m - tallies not to be easily dismissed at any time, let alone when deal markets are still a long way from their peak - even allowing for commission payable to Buying Solutions understood to be 1% for the privilege of sitting on the roster.

But with 48 firms on the panel, not everyone has been so lucky. While 15 firms billed more than £1m in fees over the three years - including magic circle players Allen & Overy and Slaughter and May - 12 firms billed less than £40,000 over the three-year period, with Herbert Smith and Berwin Leighton Paisner among those making less than £10,000. And in 2009-10, no less than seven law firms are shown to have billed zero through the framework, including Walker Morris, Dickinson Dees, Weightmans and Martineau Johnson.

And that's just when looking at spend carried out through the panel, which as many point out is still not a true reflection of what Government departments are actually spending on external legal advice, given that ministries frequently ignore the roster. One glance at the breakdown of legal spend by Government department shows the notable exclusion of Slaughters' multimillion-pound bill for legal fees run up when it advised the Treasury during the financial crisis.

Granted, the firm was instructed during some pretty exceptional circumstances, but the Treasury has not been alone in its decision to go off-panel even when employing firms that sit on the official roster - in which case, what is the point? Linklaters, for example, has been picking up a number of Government mandates over the last 18 months but does not feature on the billings for 2009-10 while, as has been referenced in the past, some Government departments, such as the National Audit Office, have continued to set up their own panels of legal advisers.

Of course, it is easy to be dismissive of law firms complaining about fees, but the basic point from partners that the quid pro quo for very competitive rates and a rigorous panel procedure should be a reasonable flow of work is inarguable. Advisers, though, are hopeful that since they've been consulted about problems with the operation of the current line-up, which is due to run out in June, there will be changes. But given the history of the roster, hopes aren't that high.

For more, see:

A little less red tape and a bit more quid pro quo needed for Whitehall super panel

No matter what awful name the Government's centralised panel for external legal services is currently going by, complaints about it from those on the roster have for years remained awfully consistent: it's far too unwieldy and work is not handed out evenly. Even so, the latest figures make for startling reading, demonstrating that criticism levelled by panel firms is in many instances justified.

In addition to highlighting the huge discrepancy between what individual firms are receiving from the panel, the data (covered in more depth here) demonstrates the extent to which large City firms have been moving into territory that would previously have been the preserve of smaller London and regional rivals.

So while longstanding Government favourites Field Fisher Waterhouse and Pinsent Masons take the top spots by legal spend when looking at the three financial years starting from 2007-08, Freshfields Bruckhaus Deringer makes it into third place over the period, with the firm topping the spend list for 2009-10 when it took home some 14% (£6.25m) of the £44.8m billed that year.

Looking at the three-year period overall, the trio each billed between £12m and nearly £16m, with Hogan Lovells not far behind on £11.6m - tallies not to be easily dismissed at any time, let alone when deal markets are still a long way from their peak - even allowing for commission payable to Buying Solutions understood to be 1% for the privilege of sitting on the roster.

But with 48 firms on the panel, not everyone has been so lucky. While 15 firms billed more than £1m in fees over the three years - including magic circle players Allen & Overy and Slaughter and May - 12 firms billed less than £40,000 over the three-year period, with Herbert Smith and Berwin Leighton Paisner among those making less than £10,000. And in 2009-10, no less than seven law firms are shown to have billed zero through the framework, including Walker Morris, Dickinson Dees, Weightmans and Martineau Johnson.

And that's just when looking at spend carried out through the panel, which as many point out is still not a true reflection of what Government departments are actually spending on external legal advice, given that ministries frequently ignore the roster. One glance at the breakdown of legal spend by Government department shows the notable exclusion of Slaughters' multimillion-pound bill for legal fees run up when it advised the Treasury during the financial crisis.

Granted, the firm was instructed during some pretty exceptional circumstances, but the Treasury has not been alone in its decision to go off-panel even when employing firms that sit on the official roster - in which case, what is the point? Linklaters, for example, has been picking up a number of Government mandates over the last 18 months but does not feature on the billings for 2009-10 while, as has been referenced in the past, some Government departments, such as the National Audit Office, have continued to set up their own panels of legal advisers.

Of course, it is easy to be dismissive of law firms complaining about fees, but the basic point from partners that the quid pro quo for very competitive rates and a rigorous panel procedure should be a reasonable flow of work is inarguable. Advisers, though, are hopeful that since they've been consulted about problems with the operation of the current line-up, which is due to run out in June, there will be changes. But given the history of the roster, hopes aren't that high.

For more, see: