Last year the SFO spent millions on external counsel as it struggled to recruit. The agency had little option, inspectors concede, but it could still improve the quality of its instructions and record-keeping
The Serious Fraud Office last year spent £7.6m – 9% of its budget – on external counsel, partly as a result of a chronic staff shortage. Are the fraudbusters themselves being taken for a ride? That was one question addressed by watchdog His Majesty’s Crown Prosecution Service Inspectorate (HMCPSI) in its latest report on the agency.
First, the good news: ‘Overall, our findings are that the SFO has fairly effective systems and processes in place to manage and control counsel spend. More recent changes have strengthened oversight of expenditure.’
There is, however, more to be done. HMCPSI’s 48-page report noted that the SFO ‘instructs counsel to fill internal legal resource gaps’. It ‘struggles to recruit sufficient numbers of legal staff’, priced out by defence firms and other bodies such as the Financial Conduct Authority.
‘The lawyers it does recruit are often very inexperienced,’ the report added. ‘We were repeatedly told in interviews by all levels of SFO staff that a lack of internal legal resourcing is a significant issue, which at times makes the instruction of counsel essential.’
The SFO is attempting to address this skills gap through an ongoing recruitment campaign. However, ‘the reality is that this situation is unlikely to improve in the short-term’. While instructing external counsel ‘may not achieve best value for money... it is difficult to see what other option the SFO has, given the recruitment challenges it faces’.
The SFO’s business plan for 2026/27 sets out goals for its workforce. They include new leadership development opportunities for staff, creating a new career development framework to strengthen in-house opportunities, and ‘rebalancing’ the use of internal and external legal expertise.
'There is no real system in place to ensure that a broad and diverse range of panel counsel are instructed'
His Majesty’s Crown Prosecution Service Inspectorate
HMCPSI examined nine cases – seven still at the pre-charge stage, one charged in early 2024 and one charged in mid-2025. It praised the SFO for ‘recent changes [which] have strengthened oversight of expenditure’ with regard to use of counsel. ‘In no instances did we see any abrogation of the SFO’s responsibility for key decision-making and overall case management,’ chief inspector Anthony Rogers noted.
One area for improvement is the preparation of business cases for retaining external counsel. While these were ‘very good at providing a general justification’, they were ‘often inadequate in specifying the particular work counsel would be expected to undertake’. The inspectorate ‘identified an inconsistency in the manner and quality of instructions to counsel which requires improvement’, adding: ‘Some instructions were not always clearly set out in writing, and some were vague and lacked detail about what counsel was being asked to do. The SFO does not have a standard process or assurance system for the preparation of instruction of counsel and this needs to be addressed.’
HMCPSI made six recommendations. These include the introduction of a central record of counsel and their performance to support future decisions. At present, it said, ‘there is no real system in place to ensure that a broad and diverse range of panel counsel are instructed. The current position allows case teams to instruct the same, favoured counsel on a repeated basis.’
Rogers said: ‘It is vital SFO builds robust cases, and that is why they must show a strong grip on how much they are spending on external counsel, demonstrate value for money, and that counsel positively contributes to strong cases. Our inspection found that SFO is effectively appointing counsel and managing their input into cases. However, we make six recommendations that if successfully adopted, could improve their performance, deliver value for money for the public, while benefiting victims and reducing potential criminal activity from across the globe.’
An SFO spokesperson said: ‘We are pleased with these findings, but we are not complacent. Delivering strong financial governance and value for money for the public are priorities for this organisation, and we take HMCPSI’s six recommendations seriously. Rebalancing our use of internal and external legal expertise is already a stated priority in our business plan 2026/27, and work to improve how we manage, monitor and instruct counsel is well under way.’
Susan Hawley, executive director of Spotlight on Corruption, said: ‘Getting the use of external counsel right is critical to the success of SFO investigations. Ultimately, the use of external counsel must be accompanied by a concerted drive by the SFO with government support to attract top legal talent to the agency, and a review of how the SFO can tailor its workplace and salary packages to achieve this.’
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