Local government will take a further step towards entering the open legal services market this week when the London Borough of Barking & Dagenham announces the reorganisation of its legal team along private sector lines.

The council has lured three senior ‘partners’ from neighbouring authorities: Yinka Owa from Haringey, Melanie Field from Camden and Winston Brown from Hackney.

The three will be freed from management responsibilities to concentrate on negotiating with clients, Nina Clark, divisional director of legal and democratic services at Barking, told the Gazette. The Labour-controlled authority is also beefing up its legal team to create what it calls ‘a groundbreaking new structure’.

The reorganisation followed a review by consultants Rockpools. Once the new structure is in place, Clark said, the council would investigate supplying services to other public bodies.

Several councils are already jockeying for position in this market, pioneered by Kent County Council, which ten years ago set up a self-funding legal service. Last year the ‘firm’, trading as KCC Legal, brought in more than £1m in external revenue from more than 140 clients.

Geoff Wild, director of law and governance at Kent, said the council plans to take on work for clients in the private sector. The move is likely to be controversial.

Helen Randall, a partner at City firm Trowers & Hamlins, said that while the Local Government Acts of 2000 and 2003 give authorities wide powers to second staff and to trade, councils attempting to sell legal services will have to grapple with obstacles ranging from indemnity insurance to the provisions of the Solicitors Act.

The employed solicitors’ code bars employees from giving advice to anyone apart from their employer or a joint venture partner, she said. ‘The role of the in-house legal department is hugely important and much neglected. However, there may be a vires issue in giving advice to outside bodies.

Wild said the vires issue is not insuperable. ‘You may have to tiptoe carefully but a combination of the amended Law Society practice rules and the provisions of the Local Government Act for promoting wellbeing should see us through.’