Local government lawyers have faced tremendous challenges over the last few years.

They have had to react to the reorganisation of local government and the introduction of compulsory competitive tendering (CCT) for legal services.

In-house legal departments must now be run as tightly controlled businesses in order to see off competition from private sector law firms.

To justify using a private law firm to help the in-house legal department a council must be sure that it will add value.At Dibb Lupton Broomhead (DLB) we believe that public sector demand for specialist legal advice will increase dramatically over the next few years.

The local government review and the application of the private finance initiative -- bringing with it new rules on the replacement of assets and provisions for lease backs and asset sharing -- are likely to fuel growth in the number of transactions and joint ventures between the private and public sectors.

The launch of the DLB local government unit coincided with the secondment of one of our lawyers to the private finance panel executive.The key to a successful partnership between the public and private sectors is that the private sector must have something of real value to contribute.

Our strategy has been to avoid competition with in-house lawyers.

Although our broad geographical base across England has placed us in a strong position to tender for legal services under CCT, we concentrate on those areas of work for which it would be uneconomical or impractical for a council to employ in-house experts.

This policy has borne fruit, particularly in corporate transactional work.

The formation of, or participation in, companies which are established to perform services formerly carried out by the council is often a transaction on which the in-house team needs help from a law firm.

Examples of these are the formation of local authority waste disposal companies under the Environmental Protection Act 1990 and the establishment of careers service companies.We receive most of our instructions from local authorities on projects of this type.

A private commercial practice will have experience in advising on company formations, business transfers and joint ventures on a daily basis and should be able to supply those skills cost effectively.If private lawye rs are to add real value to a project they need to provide more than just the application of private sector skills.

They must know and understand the legislative and political framework in which local authorities operate.

It does not help a council to engage an outside expert in company formation if that expert is not also able to advise on the vires for the formation of the company and on the implications of the Local Government and Housing Act 1989 (LGHA) on local authority participation in companies.

Similarly, a commercial practice expert on business transfers is of no use if unable also to advise on how to structure the transfer of assets to the company with reference to the impact of the rules on the set aside of capital receipts.

The council is unlikely to get value for money or quality of service if it is paying for the private lawyer's learning curve.The firms most attractive to local authorities will be those that combine breadth and depth in technical ability with an understanding of the structure and working of local government.

To work as a team the parties need to speak the same language.It requires more than mere numbers of staff to service the needs of local authorities on any significant scale.

It entails investment in lawyers whose background and expertise is essential to provide a truly dedicated and comprehensive service.

Although the volume of work that DLB has undertaken for local authorities has increased steadily over the last five years, we officially launched our local government unit only last month.The unit's two corporate lawyers are now engaged almost exclusively on transactional work for authorities, advising on the application of the LGHA on a daily basis.

Michael Orlik -- who has over 20 years' experience of working in local authorities, most recently as chief executive of Surrey Heath Borough Council -- joined us in 1990.

Brian Clark -- the founder chairman of the Association for Regulated Procurement, an independent body whose membership includes public bodies, local authorities, private contractors and academics -- joined us in January.

The unit now boasts real strength in the crucial field of public procurement and tendering strategy.

In addition to this core of public sector specialism, the unit's staff includes experts in employment, pensions, IT, construction, insurance, planning and highways law and a specialist on bond issues.We anticipate that the growth areas in the next few years will include urban development projects, schools and housing companies.

We see this as an opportunity for work for both private law firms and for the in-house departments.

We aim to work as a team with the council's legal officers who are best able to handle many of the elements of the transaction -- such as property and planning -- whilst we provide support on those aspects where we can add expertise.

Whether the project is co-ordinated by us or by the council lawyer will depend on the particular project and the individuals concerned.