The report seeks to:
• provide an overview of legal services expenditure across the Commonwealth for the 2016-17 financial year, and
• where possible, identify and report on trends and changes in legal services spend compared with previous financial years.Its basis is information reported to the OLSC by
• Commonwealth entities, as required by subparagraph 11.1(da) and paragraph 12.3(f) of the Legal Services Directions 2017 (the Directions), and
• legal service providers on the Legal Services Multi-Use List (LSMUL), who are also required to report to OLSC on the value of Commonwealth legal work they receive.Entities are required to report legal services expenditure data using a standard template to facilitate consistency in reporting and to enable a clear break down of data across the Commonwealth.
Salient information is
Total legal services expenditure
Since 2013-14, legal expenditure has been reported on a GST exclusive basis to ensure more accurate comparisons between external and internal expenditure. Staff costs, which make up the majority of internal expenditure, do not attract GST.
In 2016-17, the total legal services expenditure reported by Commonwealth agencies was $825.51m, from $792.40m in 2015-16.
The total expenditure reported by Non-Corporate Commonwealth Entities (NCCE) was $745.86m, from $712.29m in 2015-16.
The total expenditure reported by Corporate Commonwealth Entities (CCE) was $79.65m, from $80.11m in 2015-16.
Internal legal services expenditure
Internal legal services expenditure refers to the total cost of in-house practices in Commonwealth agencies.
In 2016-17, Commonwealth agencies reported internal legal services expenditure of $408.45m, from $392.50m in 2015 16.
NCCEs reported internal legal services expenditure of $368.54m, from $352.30m in 2015-16.
CCEs reported internal legal services expenditure of $39.92m, from $40.20m in 2015-16.
External legal services expenditure
External legal services expenditure refers to all legal services purchased external to the entity, including professional fees and disbursements paid to law firms, as well as briefs to counsel.
In 2016-17, Commonwealth entities reported total external legal services expenditure of $417.06m, from $399.89m in 2015-16.
NCCEs reported external legal services expenditure of $377.33m, from $359.98m in 2015-16.
CCEs reported external legal services expenditure of $39.73m, from $39.91m in 2015-16.
Commonwealth entities reported $306.63m in professional fees paid to legal services providers. In 2015-16, Commonwealth entities reported $290.22m.
Briefs to counsel
In 2016-17, Commonwealth entities reported $67.74m in fees paid to counsel, from $60.90m in 2015-16. There was an increase in the number of direct briefs to counsel, with 1,366 direct briefs to counsel in 2016-17 and 1,280 in 2015-16. The distribution of the value of briefs to female counsel increased. In 2016-17, female counsel received 26.23% of the value of counsel briefs, from 25.71% in 2015-16The report notes
OLSC, which is part of the Civil Justice Policy and Programs Division of AGD, is tasked with strategic coordination of Commonwealth legal work. This role includes ensuring that Commonwealth entities receive consistent and well coordinated legal services that are of a high standard, uphold the public interest, and are sensitive to whole of government interests.
Pursuant to subparagraph 11.1(da) and paragraph 12.3A of the Directions, NCCEs and CCEs are required to report to OLSC about their legal services expenditure.
Under the Directions, there are three methods by which Commonwealth agencies may engage legal services:
• from a legal services provider (ie a law firm), which must be included on the LSMUL, unless the agency was granted an exemption from the requirement to use the LSMUL
• from a barrister, either engaged through a legal services provider or directly briefed by the agency, and
• internally within the agency from an internal legal services provider (an in-house legal practice).
Expenditure incurred through all three methods must be reported. Fees paid to external legal services providers are recorded under ‘professional fees’ and are also broken down by provider. Disbursements paid to legal services providers are also reported. Barrister fees are reported under ‘counsel’ and are also broken down into total number of briefs, number of briefs which are direct to counsel rather than through a legal services provider (ie a law firm), and value of briefs by gender. The total costs of in-house legal practices are reported under ‘internal legal services expenditure’.
Consistent with the Australian National Audit Office’s 2006 Better Practice Guide, Legal Services Arrangements in Australian Government Agencies, the full cost of an in-house legal practice is to include:
• direct salary costs
• indirect salary costs (superannuation, leave entitlements)
• direct overhead (costs of desks, stationary, computers etc)
• indirect overhead (apportioned electricity, rent etc)
• legal unit overhead (specialist software, licences, cost of law library), and
Where is the money going? One indication is a list of providers (by value)• learning and development overhead, including training in legal and non-legal skills.
Australian Government Solicitor 35%
Clayton Utz 12%
Sparke Helmore 8%
Minter Ellison Lawyers 5%
DLA Piper 4%
King and Wood Mallesons 4%
Corrs Chambers Westgarth 3%
HWL Ebsworth Lawyers 2%
Mills Oakley Lawyers 2%
Other 20%And who is spending? Another indication ($)-
Administrative Appeals Tribunal 4,083,472
Asbestos Safety and Eradication Agency 27,429
Attorney-General's Department 27,442,760
Australian Aged Care Quality Agency 109,709
Australian Building and Construction Commission 13,435,207
Australian Bureau of Statistics 388,824
Australian Centre for International Agricultural Research 23,494
Australian Commission for Law Enforcement Integrity 750,373
Australian Communications and Media Authority 3,699,213
Australian Competition and Consumer Commission 33,049,043
Australian Criminal Intelligence Commission 5,377,073
Australian Electoral Commission 1,303,210
Australian Federal Police 25,683,303
Australian Financial Security Authority 875,251
Australian Fisheries Management Authority 782,549
Australian Human Rights Commission 1,121,734
Australian Institute of Family Studies 22,509
Australian Law Reform Commission 7,557
Australian National Audit Office 121,327
Australian Office of Financial Management 13,285
Australian Pesticides and Veterinary Medicines Authority 1,399,083
Australian Prudential Regulation Authority 5,273,619
Australian Public Service Commission 710,277
Australian Radiation Protection and Nuclear Safety Agency 411,704
Australian Research Council 147,496
Australian Securities and Investments Commission 87,901,849
Australian Skills Quality Authority 2,158,911
Australian Sports Anti-Doping Authority 922,154
Australian Taxation Office 86,465,170
Australian Trade and Investment Commission 1,347,892
Australian Transaction Reports and Analysis Centre 3,123,225
Australian Transport Safety Bureau 256,658
Bureau of Meteorology 1,058,334
Cancer Australia 101,201
Clean Energy Regulator 2,035,610
Department of Agriculture and Water Resources 8,248,145
Department of Communications and the Arts 4,866,739
Department of Defence 99,425,104
Department of Education and Training 10,373,930
Department of Employment 19,633,225
Department of Finance 38,762,012
Department of Foreign Affairs and Trade 17,722,494
Department of Health 20,791,193
Department of Human Services 41,512,648
Department of Immigration and Border Protection 79,128,991
Department of Industry, Innovation and Science 9,700,537
Department of Infrastructure and Regional Development 12,370,952
Department of Parliamentary Services 1,103,666
Department of Prime Minister and Cabinet 6,591,129
Department of Social Services 8,373,179
Department of the Environment and Energy 9,654,506
Department of the House of Representatives 61,061
Department of the Senate 32,282
Department of the Treasury 3,862,687
Department of Veterans' Affairs 10,268,726
Digital Transformation Agency 272,919
Fair Work Commission 2,758,541
Fair Work Ombudsman and Registered Organisations Commission Entity 10,417,093
Federal Court of Australia Entity 155,159
Future Fund Management Agency 3,418,058
Geoscience Australia 258,041
Great Barrier Reef Marine Park Authority 2,975,328
Independent Hospital Pricing Authority 26,860
Independent Parliamentary Expenses Authority 53,115
Inspector-General of Taxation 21,621
IP Australia 2,023,560
Murray-Darling Basin Authority 1,759,954
National Archives of Australia 819,141
National Blood Authority 255,996
National Capital Authority 152,223
National Competition Council 250,564
National Health and Medical Research Council 488,322
National Health Funding Body 31,828
National Mental Health Commission 15,430
National Offshore Petroleum Safety and Environmental Management Authority 713,535
Office of National Assessments 85,467
Office of Parliamentary Counsel 25,176
Office of the Australian Accounting Standards Board and Office of the Auditing Assurance Standards Board 62,973
Office of the Australian Information Commissioner 725,140
Office of the Commonwealth Ombudsman 598,702
Office of the Director of Public Prosecutions 151,620
Office of the Inspector-General of Intelligence and Security 80,581
Office of the Official Secretary to the Governor-General 8,481
Organ and Tissue Authority 25,953
Parliamentary Budget Office 358
Productivity Commission 16,615
Professional Services Review Agency 1,562,822
Royal Australian Mint 153,812
Safe Work Australia 610,211
Tertiary Education Quality and Standards Agency 762,475
Workplace Gender Equality Agency 13,670