Spending on law firms and barristers by local authorities has fallen by 10% in a year, research shows today. 

Efficiency drives following post-2010 austerity cuts have forced councils and other authorities to drive down their budgets, and legal spending appears to have been a casualty of this.

The research by Thomson Reuters legal business found local authorities spent £156m on legal services in 2013/14, compared with £174m in 2012/13.

Spending reductions have achieved by consolidating panels of law firms, sharing in-house legal teams between local authorities, up-skilling in-house teams and greater use of technology, for example through automated document assembly.

In the last two years, council have also set up joint ventures for shared services and agreed complex outsourcing arrangements.

Local authorities such as Buckinghamshire County Council and Milton Keynes Fire Authority have also developed in-house expertise to enable them to take on legal work for other clients to make legal departments cost-neutral. Further alternative business structures are in the pipeline or approved in Lambeth, Cambridgeshire and Northamptonshire.

Other councils have taken the step of sharing their legal services in order to create efficiencies.

For example, the South London Legal Partnership encompasses the London boroughs of Merton, Kingston, Richmond and Sutton. In Wales a group of 10 councils, including Cardiff and Newport, agreed in 2013 to share their legal services, estimating savings of £250,000 per year.

‘Local authorities are reluctant to impose cuts on frontline services, which is why legal support is being targeted to create efficiencies. These figures show that some of them are finding success,’ said Desmond Brady, head of government at Thomson Reuters.

‘More and more councils have even started to look beyond the traditional approach of in-house legal teams supplemented by a panel of firms, towards models where legal services need not be a major cost.’

Spending by local authorities on legal services is now at its lowest point since 2010/11, the research found.

Thomson Reuters said while local authorities spent an average of £360,000 on external law firms in 2013/14, that was considerably outstripped by the UK’s unitary authorities, which each spent an average of £561,000, and London boroughs, which each spent an average of £753,000.