Public sector pay curbs are hampering an ambitious initiative to build a critical mass of commercial lawyers in Whitehall, a senior civil servant has claimed.

Claire Johnston (pictured), a director general of the 1,400-lawyer Government Legal Department, has also pledged to tighten up procurement after discovering that a ‘significant’ proportion of the £105m spent annually on external law firms is not being channelled through the government’s legal services framework.

The department has in recent times ‘brigaded’ its commercial lawyers to establish a dedicated commercial law group, Johnston said.

She added: ‘Many government departments had one or two commercial lawyers. A small number of government departments had more significant numbers, [such as] the Ministry of Defence… [There] were a lot of little tiny pockets of commercial law expertise. We wanted a proper structure with a proper senior expert.’

Johnston said it is ‘quite clear that the government has got to seriously get a grip on its commercial capability and wants lawyers to help it do that’.

However, she conceded that the civil service has a struggle to lure lawyers from private practice.

She said: ‘It has been challenging but not impossible. What we’re seeing with our commercial policy colleagues is that they, too, are looking at how they square the need for this high-level private-sector-type expertise with civil service pay structures and grading structures, and an announcement that pay rises are going to be no more than 1% for the next four years, for example.’

GLD diversity champion Naomi Mallick told the conference that the service should be representative of the communities the government serves. The service is ahead of the civil service as a whole, but a two-year action plan will try to improve diversity declaration rates and focus on social mobility.

Johnston said the department had moved to review its external legal spending as a commercial imperative. ‘We do have a framework for external legal services [but] we weren’t sure that was working very well. We needed to find out what government is spending on external legal services. That was actually not that simple to do.’

The figure turned out to be £105m per year, she added, but ‘quite a significant amount’ was not going through the framework.

The current framework, which expires on 31 January 2017, will be replaced with four procurement ‘blocks’, which will be in place by the end of this year.