Commonwealth Legal Outsourcing Changes Include a Push for Pro Bono

The Attorney-General's recently announced reforms to the Legal Services Directions send a clear signal to legal service providers to take seriously their pro bono responsibilities to the community.

Second Wave of Reforms

On 17 September 2008, the Commonwealth Attorney-General, the Honourable Robert McClelland MP, announced a second series of reforms, intended to cut red tape and streamline the way in which Australian Government agencies purchase legal services.

Importantly, the reforms also give effect to the Government's commitment to encouraging its external legal service providers to engage in significant amounts of pro bono work. The reforms require agencies to assess a firm's pro bono commitment when evaluating legal services tenders. This new requirement stands alongside the Rudd Government's commitment to community legal centres and legal aid programs, which involved a funding increase this year of $17 million.

In welcoming the reforms, the Attorney-General said, "I recognise that many in the Australian legal profession already make a significant contribution to the community through their pro bono work. It is appropriate that such work is a relevant consideration when agencies purchase legal services".

What do the amendments require?

A Government agency must take the following matters into account when deciding if it will enter into a Deed of Standing Offer or a contract for legal services:

• the amount and type of pro bono work the legal services provider has carried out or will carry out; and
• whether the legal services provider has signed up to the National Pro Bono Aspirational Target of the National Pro Bono Resource Centre (the Aspirational Target).

The Aspirational Target establishes a benchmark of 35 pro bono hours per lawyer per year at signatory firms. The amendments do not appear to require the 35 hour benchmark to be achieved, nor does it actually mandate that firms sign up to the Aspirational Target. While Government agencies must take these matters into account before contracting for legal services, it is not clear what weight, or priority, will be given to such matters when assessing whether or not to enter into a contact for services. the amendments into practice.

What will the future hold?

The amendments with respect to pro bono work are likely to be of vital importance in increasing and improving the pro bono contribution of the legal profession. The National Pro Bono Research Centre has recently published the results of its national survey, which show that the nation's largest 25 firms provided 194,000 hours of pro bono legal services last financial year.

Those big firms that are signatories to the Aspirational Target, overall performed better than non-signatory firms in average pro bono hours per lawyer. Interestingly, the five big firms which have already signed up to the Aspirational Target scheme were the only firms to meet an average of at least 35 hours per year, and provided a total of 112,000 hours of pro bono work, which is more than half of the total contribution made by all 25 firms. In other words, an Aspirational Target signatory firm performed on average more than five times the amount of pro bono work of a non-signatory firm.

If these results are any indication of the overall effect of the Aspirational Target, it appears that the Government's incentive for firms to become signatories to the Aspirational Target will help to deliver the increased provision of pro bono legal services.

The reforms send a strong message to the sector about the value placed by the Government on the provision of pro bono work by firms. The changes also serve as an important measure to complement the existing work of the community legal sector and the State and Territory Legal Aid Commissions, in order to facilitate access to justice.

The Commonwealth reforms did not adopt the mandatory pro bono requirements used by the Victorian Government. The scheme in Victoria involves a specific value of pro bono work as a condition of the contract for legal services, which is calculated as a proportion of the value to be derived from Victorian Government work. The Commonwealth model has the potential to encourage greater increases in pro bono participation by external legal providers than the Victorian approach. For example, a firm of 500 lawyers which will perform $2 million of Government legal work per year, would be required to perform 500 hours of pro bono work under the Victorian model, but would be asked to aspire to 17,500 hours under the Commonwealth arrangements.

It remains to be seen whether the reforms provide the necessary impetus to generate more widespread involvement in pro bono legal services in a meaningful and effective manner. If not, it may be necessary to mandate achievement of pro bono targets by the Commonwealth.

However, the message from the Commonwealth Government is clear. If you want to do legal work for the Government, you should do pro bono work and you should become a signatory to the National Aspirational Target.

What are the reporting obligations?

In terms of reporting obligations, the Deed of Standing Offer requires legal service providers to report to the Office of Legal Services Coordination (OLSC) in relation to pro bono work that they have done, and aspire to do, within 30 days after the end of each financial year, using a standing reporting template approved by OLSC.

To this end, a draft reporting template has been issued by OLSC, inviting comments from legal service providers by 28 November 2008, for intended finalisation by December 2008.

Pro bono amendments in the broader context

We note that the most recent amendments follow changes announced earlier this year, seeking to advance the efficient resolution of disputes in addition to fostering greater transparency and competition in the Government legal services market.

In addition to the amendments in respect of pro bono legal services, for the first time, Government agencies tendering for legal work will utilise a common tender package. Significant elements of the new package include:

• requiring all agencies to use the approved common tender package developed by Office of Legal Services Coordination (OLSC);
• allowing smaller Government agencies to have access to tender panels that have been established by larger agencies in the same portfolio; and
• removing 'mini tenders' for legal work valued at less than $80,000.

The most recent reforms build on amendments announced earlier this year, which, as a whole, seek to improve the Government's legal purchasing processes and to deliver taxpayers value for money. The introduction of a common form tender package is expected to result in greater efficiency, and less administrative burden, for Government in the procurement of legal services.

In the spirit of promoting the Government's human rights and equal opportunities agenda, the Government's earlier reforms included amendments to the Legal Services Directions that promote equal opportunity briefing practices; ensure that legal service providers who undertake pro bono legal work are not discriminated against; and, promote the use of alternative dispute resolution in disputes involving Government agencies.