The Mayor of London’s economic development agency has slashed millions of pounds from its spend on panel law firms since 2007, according to recently released figures.

The London Development Agency (LDA) spent more than £8.53m on advice from panel firms in the 2007/08 financial year, but this fell to £6.61m in 2008/09, and totalled £3.57m for the period 1 April 2009 to 9 November 2009. If spending continues at the same rate this year, total legal spend for the 2009/10 financial year will be around £5.35m.

The figures emerged in response to a London Assembly question to mayor Boris Johnson (pictured) from Len Duvall, London Assembly member for Greenwich and Lewisham, lodged in December.

Johnson said that the LDA ‘continues to reduce its external legal spend’.

The decline in legal spend has coincided with a fall in the LDA’s overall budget. In 2007/08 its budget was £640m, falling to £585m in 2008/09. The budget forecast for 2009/10 is £461.7m.

A report prepared for an LDA board meeting in September last year noted that the LDA’s in-house legal resources had to be ‘enhanced’ in 2009 ‘to provide more consistent input to commercial matters with greater control over the use of external firms.’

The LDA’s current eight-strong law firm panel comprises: south-west firms Ashfords and Burges Salmon; City and national firms DLA Piper and Eversheds; Anglo-Scottish firm Shepherd & Wedderburn; and City firms Herbert Smith, Lovells and Stephenson Harwood. Before a review in the summer last year, there were 18 firms on the panel.

In September last year, Duvall questioned Johnson over how much the LDA spent on law firm advice for the Olympic Park project, after the LDA admitted to a £160m budget overrun on the project.

Responding, Johnson pointed to the ‘complexity’ of the Olympic land acquisition process and said that due diligence work carried out by Eversheds and DLA Piper cost £230,000 in total. Johnson said that this was ‘an effective and efficient use of resources.’