legal management service
Guidelines for
Reviewing
Government Legal
Services
CONTENTS
BACKGROUND...............................................................4
I.
REVIEWING AGENCY LEGAL SERVICES ............. 5
A. Why? ................................................................................................... 5
1. Increased legal expenditure ........................................................ 5
2. Increased client service culture .................................................. 5
3. Changes in legal service delivery ............................................... 5
4. Increased accountability ............................................................. 6
Reviewing Internal Agency Legal Departments' Goals...............6
1. Scoping the Review......................................................................7
II.
BASIC INTERNAL REVIEW STEPS ................................. 7
1. Current view ................................................................................. 7
2. Measuring productivity ............................................................... 7
3. Assess change potential .............................................................. 8
4. Options to improve..................................................................... 8
5. Best practice ................................................................................. 8
6. Evaluation mechanism ............................................................... 8
III. SPECIFIC REVIEW TASKS .................................................... 9
1. Define scope and expectations of Review ............................... 9
2. Assess current legal needs and mix of providers
and legal budget .............................................................................. 10
3. Capability and structure of the department ........................... 10
4. Client surveying………………………………………….11
Legal and practice management skill requirements .............12
Use of information technology ...............................................12
Communication links between legal department
and agency staff .........................................................................12
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Legal compliance and risk management.................................13
Performance indicators.............................................................13
IV. METHODOLOGY...........................................................13
Widespread consultation with clients, management
and staff........................................................................................13
1. Transparency of the Review process........................................13
2. Consultation with employee organisations..............................13
3. Collection of quantitative and qualitative data........................14
4. Conduct of interviews and focus group discussion................14
5. External consultative and benchmarking visits.......................14
Analysis of information and development of
strategies for change....................................................................14
Negotiation of major issues with stakeholders..................….14
Implementation............................................................................15
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BACKGROUND
The Attorney General’s Department is acknowledged as the central legal department within the
New South Wales public sector. Accordingly, there is an expectation that the Department should
occupy a key strategic role in advising government and government agencies on the provision and
management of legal services.
In 1995 the Attorney General’s Department established the Legal Management Service. The key
objective of the Service is to assist New South Wales government agencies to obtain and manage
effective and efficient legal services.
These guidelines provide assistance for agencies in reviewing their legal service needs and in the
development of options for the provision of legal services. These guidelines should be read
alongside the accompanying flow charts. They should also be read alongside the guidelines which
have been prepared on Outsourcing Government Legal Work.
The model for reviewing government legal service needs and internal capability
may be used by agencies in a variety of circumstances:

to conduct an independent review of in-house legal service capability;

in conjunction with a determination to tender out some legal services; or

with a view to restructuring an existing legal department to ensure best practice in the provision
of legal services.
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I
REVIEWING AGENCY LEGAL SERVICES
A. Why?
Government legal services are now sought and provided within a significantly changed
government environment. The threshold question is to ask why an agency's legal department or
section should be reviewed. Four immediate responses might be:
increased legal expenditure;
1. increased client service culture in government and in the legal profession;
2. changes in legal service delivery; and
3. increased accountability.
INCREASED LEGAL EXPENDITURE
In 1995 and 1998 the New South Wales Attorney General's Department surveyed all New South
Wales Government Agencies in respect of their expenditure on legal services both internal and
external. Those surveys revealed:
Many agencies are not clearly or easily able to identify their legal costs.
The engagement process for external legal providers is not as rigorous and systematic as it should
be, with a continuing reliance on "personal" and "historic" factors in the selection process.
While between 1995 and 1998 an increasing number of agencies implemented systems to
objectively measure the performance of their legal services, there is an ongoing need for
monitoring and review.
There is significant scope to improve the efficiency and effectiveness of agency legal services
through proper market testing and benchmarking.
There is not a high awareness of the legal support function in many agencies.
2. INCREASED CLIENT SERVICE CULTURE
Internal and external clients are increasingly demanding higher service delivery standards. In
government, in business and in the legal profession, continuous improvement programs are being
developed and implemented. These include a greater emphasis upon client focus and quality of
service delivery.
3. CHANGES IN LEGAL SERVICE DELIVERY
Throughout the private legal profession lawyers are reviewing and reshaping the way they provide
legal services. This should also be true within the government legal service market. The delivery
of legal services remained essentially static for a considerable period of time. Some specific recent
changes include:
the way in which solicitors and barristers now work more closely together;
the use of alternative dispute resolution (ADR) techniques in a range of dispute situations;
altered billing arrangements;
the use of lawyers in policy formulation;
the use of lawyers as part of a strategic management team;
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
the establishment of clearly defined outcomes at the commencement of a legal matter with
appropriate financial recognition for satisfactory performance; and

quality assurance programs have also led to a greater emphasis on measurement and on the
re-design of systems and procedures.
4. INCREASED ACCOUNTABILITY
In parallel with continuous improvement and quality assurance programs there is heightened
accountability for all professionals. Lawyers are increasingly required to justify to their clients the
time spent on matters, the specific contribution made within a governmental or commercial
environment and to demonstrate the manner in which value has been added.
It is important to also consider the demands of accountability in the public sector, in terms of
performance, cost containment and probity.
B. Reviewing Internal Agency Legal Departments' Goals
When undertaking a Review of the goals of an agency’s internal legal department or branch, the
following steps may provide a useful starting point:

Establish what legal services are relevant to the agency needs and what exposure points may
currently exist.

Establish what the current capability is and how that capability matches the agency's needs.

Evaluate performance of any external providers.

Determine the most cost-effective way of delivering the services once identified.
In establishing what the needs are and how current provision meets these needs there may emerge
areas of legal exposure, or areas of legal knowledge which are not currently met by personnel
within the agency. These should also be documented.
As the body of legal knowledge increases in complexity, it is self-evident that a small internal team
of lawyers (either in government or in a private corporation), however well motivated and
resourced, will find it increasingly difficult to meet all areas of legal servicing to the necessary
standard. The Review should acknowledge this reality at the outset.
1. SCOPING THE REVIEW
The following matters should be taken into account:
the organisation's mission statement, corporate objectives and structure;

the existing interaction of legal work with the activities of the agency as a whole. To what
extent do existing legal staff contribute to the agency's planning and policy processes?
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
any relevant industry standards and best practices;

any regional requirements, (for example, where agencies have regional offices, to what extent
does legal work need to be completed in those regions and to what extent might it be
completed centrally?)

the specific capability of existing legal service providers;

the current use of other public legal services, such as the Crown Solicitor's Office;

the current use of the private legal profession including solicitors and barristers;

any policy considerations influencing the desired mix for the provision of legal services;

the use of information technology; and

evaluation mechanisms.
II BASIC INTERNAL REVIEW STEPS
CURRENT VIEW
The first step is to examine how legal services are currently viewed in relation to the corporate
objectives and how they can be integrated with the rest of the work of the agency. This will
generally require some form of surveying. Existing internal clients should be questioned on the
service they receive and this should be set alongside the broad corporate objectives.
2. MEASURING PRODUCTIVITY
It is essential to know exactly what is spent on legal services, both internally and externally. In
some agencies this figure is not immediately available. This step might also consider some
immediate comparative assessment of legal costs from external providers.
The survey of legal work performed internally and externally on behalf of the agency should
include reference to outcomes achieved, value of those outcomes to the agency, contributions by
individual lawyers and external providers.
3. ASSESS CHANGE POTENTIAL
Having examined the current provision of legal services, including internal structure, current
expenditure and client service assessments, determine immediate potential for streamlining any
existing, fragmented legal services. Specifically, this may include looking at the amount of time
lawyers currently spend actually doing legal work as opposed to completing work which might
effectively be done by non-legally qualified staff and examining the comparative costs of the
internal service with current market rates for external providers.
4. OPTIONS TO IMPROVE
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The review of an internal legal department should include consideration of options such as the
appointment of a Legal Service Manager with management responsibilities for evaluating legal
matters, assessing work internally and instructing specific legal providers in private legal firms or at
the Bar. Some agencies may determine to develop a different working relationship with the Crown
Solicitor's Office or may decide to tender specific parts of their legal work either to a single firm or
to a panel of firms. Some agencies may determine that a cost effective option is to hire additional
internal lawyers. Cost benefit analysis of each of these options will be a necessary step.
5. BEST PRACTICE
It is essential that government legal service providers examine best practice initiatives in a range of
different environments including other public sector agencies at both a State and Commonwealth
level, legal firms and international developments. This is an opportunity for managers to set
benchmarks for the future and to improve every aspect of the delivery of legal services. Being
aware of developments offered through programmes such as the Quality In Law programme
("QIL") and other continuous improvement programmes specifically designed for the legal
profession will be useful.
6. EVALUATION MECHANISM
Measurement of increased efficiency is essential.
Typical performance measures include:
cycle time (time to complete a legal matter from start to finish);
production (number of services completed in a time frame);
drafts and rejects (number of errors in a series of matters);
cost of producing typical matters;
complaints received;
new instructions;
lost clients - this may include situations where internal clients choose to bypass the legal
department and go straight to an external legal service provider without reference to the legal
department;
matter values - including moneys saved.
Measures for improvement can focus upon efficiencies such as:
accuracy;
productivity;
cycle time; and
labour costs.
Measures for effectiveness can include:
client satisfaction;
quality;
cost;
delivery; and
reasons for reworking materials.
Measurement is an essential step in the Review.
III SPECIFIC REVIEW TASKS
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DEFINE SCOPE AND EXPECTATIONS OF REVIEW
At the outset it is necessary for the agency to define the parameters and specific expectations of
the Review. Whether the Review is to be carried out by an internal officer or team or whether the
Review is to be tendered out for completion by external consultants, it is necessary to determine
what is to be achieved through the Review. The scope could include:
consideration of all existing legal staff;
type of legal work done (routinely, occasionally, rarely);
work done externally and internally; and

work performed by the Crown Solicitor's Office.
The scope should be set out in a clear Review Brief. The broad expectations of the Review should
be detailed including reference to the gathering of financial data, qualitative data from those
employed in the legal department, from internal clients and possibly any external providers
including the Crown Solicitor's Office. The Review should have a specific time frame, detailed
methodology, budget and reporting arrangements.
ASSESS CURRENT LEGAL NEEDS AND MIX OF PROVIDERS AND LEGAL BUDGET
The starting point for most agencies will be a desk audit of the type of legal work which is required
by the agency. Many agencies will already have access to work type analysis data which should be
reviewed. In addition, the current mix of providers should be reviewed. This mix will include:
the use of in house lawyers;
the use of the Crown Solicitor's Office;
the use of any external legal firms; and

the use of Counsel.
The expenditure on all legal services on an annual basis, (ideally for the past three to five years)
should be determined. Financial trends should be graphed with particular references to any
increased use of any one of the providers, internal / external - solicitors, barristers, Crown
Solicitor's Office etc.
Legal expenditure figures are routinely provided as part of normal annual budgeting cycles.
However the 1995 and 1998 agency surveys conducted by the New South Wales Attorney
General's Department revealed some lack of clarity in respect of fees paid to the Crown Solicitor's
Office and fees paid to barristers.
3. CAPABILITY AND STRUCTURE OF THE DEPARTMENT
Most in-house legal departments will have two main objectives:
Providing direct assistance with legal matters, referring matters to external firms or the Crown
Solicitor's Office where appropriate.
(i) Preventing legal exposure through training courses and other risk management strategies.
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The existing capability should be reviewed in detail. This will include a detailed review of the day
to day legal work of each lawyer/officer, including time spent on matters, any internal charge back
arrangements and professional development plans.
The current structure of the legal department should be reviewed. In general terms, the move
both within public sector legal management and corporate sector legal management, is for the inhouse legal manager to manage the legal function rather than complete actual legal matters.
In agencies where there are numbers of lawyers, the legal service manager should allocate work
and ensure quality control as well as providing some intellectual leadership in respect of the law. It
is unlikely with the increasing complexity of the law, that even with a number of lawyers staffing
an agency legal department, that it will be possible for all legal work to be completed in-house.
The structural review should include reference to specialisations, continuing professional
development and anticipate growing and contracting areas of legal work. The Byers Gill Report
1992, recommended the appointment of a Legal Service Manager in each agency who would
coordinate-ordinate the provision of legal services. Whatever the preferred structure, options
should be considered for how the services can be provided in the most efficient and effective way.
The Review of the structure of the legal department should be carried out with regard to other
management changes within the agency. With increasing management autonomy, accountability
and emphasis upon continuous improvement, the legal department should be encouraged to
reflect on how it might re-invent itself within the context of other organisational changes. The
most obvious of these may well be an increased client focus with lawyers in the legal department
being encouraged to survey their internal clients and to set specific benchmarks for performance.
4. CLIENT SURVEYING
In most cases agencies will need to survey their internal clients to establish perceptions of the
in-house legal department, particularly the quality of service and level of communication provided
by the legal department. The methodology for this stage of the review should be a survey
instrument. It is recommended that such a survey be brief (ideally one to two pages of questions)
and that some direct one on one follow up interviews be conducted as part of the surveying
process.
Questions such as the following may be appropriate:
What are your expectations of the agency legal department?

What could the legal department do to improve their contribution to your programme/business
unit?

What are the in-house legal advisers’ three greatest strengths?

What weaknesses do you discern in the in-house legal advisers?

Overall how would you rate their service?

Comment on their knowledge of your day to day work.

Comment on service delivery.
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
Comment on technical skills.

How would you rate communication and responsiveness?

Comment on the continuity of service delivery.

Do you instruct external law firms directly?

How would you compare external firms which you have used and the in-house legal
department?

What should the in-house legal department change or introduce to improve their level of
communication?

Would you find pro-active legal education workshops helpful?

How would you describe the in-house legal advisers in terms of their problem solving capacity?

Have you been satisfied with the reporting of the carriage of matters by in-house legal officers?

In comparison with other professional service providers, how would you rate the in-house legal
department?

Comment specifically on timeliness and cost if you have worked directly with lawyers from the
Crown Solicitor's Office.
5. LEGAL AND PRACTICE MANAGEMENT SKILL REQUIREMENTS
The Review will ideally look at the legal skills which it is anticipated the agency will require of its
lawyers (both internal and external) over the coming years.
Interviews with senior managers should elicit information on changing public sector requirements.
For example, increasingly complex commercial transactions which government may enter into,
Trade Practices legislative changes, the impact of the Goods and Services Tax (GST), certain
environmental management system requirements, joint venture private and public sector
transactions may all require expertise which may not currently reside internally.
This stage of the review should include reference to the corporate plans of the agency, likely
expansion or contraction of any programme areas and responsibilities.
6. USE OF INFORMATION TECHNOLOGY
The Review should include a full examination of existing use of information technology (IT) by
the lawyers. Not only should word processing arrangements be reviewed but more significantly,
document management systems, precedents, case management systems, litigation tracking systems
and other available legal service applications should be considered.
The training of lawyers in respect of the use of IT should also be reviewed. The legal department
should seek external assistance either from the IT specialists within the agency or from specialist
legal IT consultants to ensure that all of the options for best practice in the use of information
technology in legal practice are obtained.
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COMMUNICATION LINKS BETWEEN LEGAL DEPARTMENT AND AGENCY STAFF
The Review should examine all direct and indirect links between in-house lawyers and agency
managers.
For example, the legal department should provide examples of internal
correspondence, both formal and informal, any newsletters, brochures, capability statements or
other means of communication with agency officers.
The objective here is to examine the way in which in-house lawyers currently communicate their
legal expertise, direct carriage of matters and provide details of changes in the law that are relevant
to individual agency managers.
The role played by in-house lawyers in any policy formulation, general strategic planning and
external departmental publicity should also be reviewed.
8. LEGAL COMPLIANCE AND RISK MANAGEMENT
It is essential to review the role played by in-house lawyers in anticipating exposure to legal risks.
The systems, policies and procedures to alert people to their legal compliance responsibilities
should be documented. Any specific risk management strategies currently initiated by the legal
department should be listed and appropriate recommendations made.
9. PERFORMANCE INDICATORS
Having gathered all of the data above through the detailed Review tasks, the Review team should
develop a series of performance indicators and productivity targets for assessing the performance
of legal services, both internal and external. These indicators should go well beyond time and cost
alone. Specific desired outcomes and value of legal advice to the agency should be considered.
A separate set of Guidelines on Outsourcing Government Legal Work have also been developed by the
New South Wales Attorney General’s Department. These guidelines include notes on the setting
of performance indicators for external legal service providers. These should be reviewed alongside
the Review Guidelines.
IV METHODOLOGY
WIDESPREAD CONSULTATION WITH CLIENTS, MANAGEMENT AND STAFF
The Review should be conducted in a consultative manner. The ideal model would include
publication to the agency of the Review's commencement, its scope and objectives, the team to
complete the Review and their credentials, and the reporting of findings both to senior
management and to the organisation as a whole. At the outset a consultation plan should be
prepared with publicity for anticipated surveying, individual interviews, and calls for submissions as
appropriate.
2. TRANSPARENCY OF THE REVIEW PROCESS
Most internal Reviews will achieve more effective change where they are conducted in a
transparent manner with staff being encouraged to understand the purposes of the Review, the
role they might play in the Review, and access to findings. Each agency will have its own
procedures for involving staff whether through newsletters, focus group meetings, staff seminars,
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large staff meetings, one on one interviews, memos to staff and/or inclusion in normal staff
publicity materials. It is recommended that where a legal service department is to be reviewed, the
staff of that department receive advance notice that the process is about to commence and that
they be informed that their input will be highly valued and encouraged at all stages of the Review.
3. CONSULTATION WITH EMPLOYEE ORGANISATIONS
To ensure maximum cooperation and disclosure, employee organisations should
be alerted in advance to the objectives, scope and methodology of the Review.
4. COLLECTION OF QUANTITATIVE AND QUALITATIVE DATA
Quantitative data will generally be collected through written survey instruments and these need to
be carefully prepared, analysed with respect to normal statistical procedures, and the findings made
available to staff.
Qualitative data will generally be gathered through the conduct of individual interviews, focus
groups, receipt of submissions and will need to be assessed alongside any quantitative data.
Reviews of legal departments are likely to be able to be conducted relatively quickly and with a
minimum of disruption to agency staff. In most cases a comparatively small number of people will
be employed within the legal department and in most cases managers at certain specified levels will
have most contact with the lawyers in the department.
5. CONDUCT OF INTERVIEWS AND FOCUS GROUP DISCUSSION
Any interviews which are conducted need to be prepared for in advance. Ideally staff will receive
prior notice of the purpose of the interviews and will be reassured as to the confidentiality of their
responses.
Where focus groups are held, they should have a clear time frame. Any consultants (either internal
or external) conducting the review should ensure that the majority of time is spent listening rather
than talking to the group. Permission will need to be sought to tape, or record in some other way,
focus group discussion, to ensure adequate analysis of data following focus groups.
6. EXTERNAL CONSULTATIVE AND BENCHMARKING VISITS
These are likely to include desk audits of developments in legal service provision in other
government agencies, both in this State and at the Commonwealth level, and could involve review
of overseas literature, and visits to private legal firms. The major emphasis here should be on
ascertaining changes in the practice of law, the role of in-house legal advisers, both in government
and in the corporate sector, and in looking at systems for benchmarking.
7. ANALYSIS OF INFORMATION AND DEVELOPMENT OF STRATEGIES FOR
CHANGE
Once all information has been gathered, as per the specific steps outlined above and utilising the
methodology outlined here, an analysis of information gathered is required. Following this
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strategies for change should be developed. Detailed strategies including specific objectives,
specific actions, responsibilities, resources required and evaluation mechanisms should be
developed for each major recommendation. These strategies for change should be quite detailed.
8. NEGOTIATION OF MAJOR ISSUES WITH STAKEHOLDERS
Following the development of the strategies for change it would be appropriate for senior
management or the delegated Review team to expose the strategies to major stakeholders including
members of the legal department and other senior managers. Following this stage of consultation
implementation of any approved changes could be made.
9. IMPLEMENTATION
Implementation of any approved strategies should be conducted in a constructive and consultative
manner. The implementation of change is likely to involve some restructuring, either of the legal
department itself, or the individual roles of lawyers within the department. This should be handled
with clear justification for changes being shared with staff and desired outcomes discussed.
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