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It is a habit of caught-out ministers to claim that they were acting on legal advice. It is a requirement for government lawyers being asked for advice on a course of action to provide an analysis of options with the risk attached to each being set out. It is a matter for the person receiving the advice to decide whether they are willing to run the risk. In an extreme case - where the advice is that a proposed course would be unlawful but the person still wishes to proceed - there is a duty on the lawyer to raise the issue through their management chain and ultimately with the Attorney General, as it is a breach of the Ministerial Code to act unlawfully. It is not however a breach of the Code to continue where the advice is that there is a high risk that the proposed course of conduct is unlawful but there is an arguable case that it is not.
Government-employed lawyers' time is charged at cost, there is no profit mark-up.
External barristers have (except in exceptional circumstances i.e. there is no relevant expertise) to be on a panel approved by the Attorney General at rates which are substantially below what would normally be charged to privately-paying clients (though certainly above current legal aid rates). I have known cases where such barristers are conducting litigation against opponents who are represented by counsel on three or four times that hourly rate - though of course we are not talking about human rights/individual against state abuse cases in this context.