A new local authority alternative business structure is targeting the health sector as one of its main growth areas.
As first reported on Legal Futures, LGSS Law, the joint legal services department of Northamptonshire and Cambridgeshire county councils, became an ABS yesterday. LGSS is one of the biggest public sector shared services organisations in the country, with 1,300 staff.
Quentin Baker, director of legal services at LGSS, said changes to health services were producing a “huge demand” for legal advice.
“There has traditionally not been a lot of in-house legal support in the health sector,” Mr Baker said. “They’re totally reliant on commercial law firms and that can be very expensive.”
Mr Baker said that among LGSS Law’s 80 external clients was Cambridgeshire and Peterborough Clinical Commissioning Group, responsible for over 100 GP surgeries.
He said LGSS Law had recently won a tender for another regional health service provider, along with specialist law firms Hempsons and Capsticks.
“We have no traditional partnership structure or expensive offices,” Mr Baker said. “Our fees are very, very competitive compared with specialist private sector law firms.
“We solely work for the public sector and not-for-profit bodies, and this is burnt into our culture. We’ve no intention of doing people’s divorces or anything like that.”
Along with health, Mr Baker said LGSS Law would target housing associations and other social landlords, which often had small legal teams, and the charity sector.
“We would very much like to work with charities active in our communities,” he said. “This fits in with the other clients we work with.”
As an example he gave the Arthur Rank Hospice Charity, which is planning to build a new hospice, and where LGSS Law beat off competition from private sector law firms.
Mr Baker said the ABS’s other clients included both district councils, such as Huntingdonshire, and parish councils. “District councils often do not have the critical mass you need to provide full service. We can provide these services much, much more efficiently.
“With austerity and pressure on taxpayer-funded services, we can provide a good and sensible way of making the money go further.”
Mr Baker said LGSS Law’s two main clients would remain Cambridgeshire and Northamptonshire county councils, with their combined spending power of £1.7bn.
He said that since the two councils set up LGSS in 2010, annual expenditure on legal advice from external law firms had fallen from “millions of pounds to almost nothing”.
Mr Baker said the councils would be benefit from economies of scale as the ABS expanded. “We’re very business-like and customer-focused, but we’re not commercial in the sense of being driven by a profit motive,” he said.
Mr Baker added that LGSS Law had increased the volume of its external legal work by almost three times in the last four years.
In a separate development, think tank Localis described legal services as a likely “future boom area” for local authorities.
Localis said in a report that one in four councils (24%) were currently generating external income from legal services, while a further 43% were considering the move.