Birmingham City Council has negotiated a deal that will see it join forces with 38 other local authorities to purchase legal services from 11 law firm panels, involving 12 firms.

The council has also extended an invitation to every other local authority in England and Wales to use its legal panels at the same preferential rates. The deal comes at a time when local authorities have been told by government to cut their spending by 10%.

Mirza Ahmad, corporate director of governance at Birmingham City Council, said: ‘All local authorities are welcome to approach me to see if they can benefit from these preferential rates and save time and money on their own tendering arrangements… [The new arrangement] demonstrates local government’s determination to deliver even greater economies, efficiencies, effectiveness and productivity from law firms.’

He added that the new rates negotiated with panel firms ‘build upon the exceptionally competitive rates that we previously enjoyed’.

Birmingham is the largest local authority in the UK, with a £6m legal spend. This is the third time the council has renegotiated its panel arrangements, but the first time it has formally opened up its panels to other local authorities. The current contracts will run for four years.

The panels include civil and criminal litigation; employment; highways; housing; licensing; property; and private finance initiatives. The 12 firms that have won panel places include national firms Eversheds, Hammonds, Shoosmiths and Pinsent Masons; Birmingham firm Wragge & Co; south-west firm Bevan Brittan; and Cobbetts in the north-west.

The 38 local authorities that have joined the deal range from large unitary and county councils to smaller district councils. They include Herefordshire County Council, the London Borough of Hackney and Wolverhampton City Council.

The initiative reflects a growing trend of collaboration between councils for the purchase of legal services. However, it is understood to be the first time a panel arrangement has been opened up to any local authority in England and Wales.