Andrew Leigh

On behalf of Attorney-General Nicola Roxon, I addressed the Public Sector In-House Counsel Conference this morning.

Andrew Leigh MP on behalf of
The Hon Nicola Roxon MP

8^th Annual Public Sector In-House Counsel Conference 2012
30 July 2012


Ministerial Keynote Address:
In-house counsel: Delivering the benefits while avoiding the risks

Acknowledgements

First, may I acknowledge the traditional owners of the land we meet on – and pay my respects to their elders, both past and present.

Introduction

It is a pleasure to join you here today for the 8^th Public Sector In‑House Counsel Conference.

I regard myself as a lapsed lawyer, having practiced for only a short period in the mid-1990s, for Sydney law firms Coleman & Grieg and Minter Ellison. My last job in the legal profession was as Associate to former High Court Justice Michael Kirby.

Justice Kirby once told the story of how he became an in-house counsel. He had been offered a job at the firm Ebsworth & Ebsworth, but they withdrew the offer when one of the partners lost his seat in the federal election and had to take his old office back. (Politics has always had a little less job security than most occupations!)

Michael Kirby then took up a job with Hickson, Lakeman and Holcombe. He said of this experience: ‘Bruce Holcombe wanted me to be a kind of in-house counsel for the firm.  ...  I began appearing in court as advocate for a growing number of insurance companies willing to use a young solicitor in place of unloved barristers.  ...  It was very demanding.  Returning to the office at the end of a hard day of advocacy before a judge, I had to pick up the threads of my work as a solicitor.  I had to see witnesses and draft subpoenas.  I came to realise that, without support within the firm, it is very difficult to combine the life of an advocate with the ordinary life of a solicitor. ’

My time as associate to Michael Kirby was vital in shaping who I became in later life. Who knows – perhaps if the work of in-house counsel had been less demanding, he would never have joined the bench, and I might not be standing before you today!

The Commonwealth Attorney-General, Nicola Roxon, has asked me to pass on her apologies for not being able to join you today, and she passes on her best wishes for a productive conference.

She actually referred to you as having a difficult, challenging and potentially dangerous job… not unlike lion tamers. I’m not sure who are the lions in that analogy – perhaps a few people come to mind for you!

Nicola has set a clear agenda in her seven months as the Commonwealth Attorney, ranging from improving access to justice for one-off litigants, and expanding diversity within the judiciary, through to consolidating and harmonising anti-discrimination law and strengthening Australia’s cyber security.

But she is also focussed on her role overseeing legal conduct, and legal expenditure, by the Commonwealth. And of course the expanding in-house legal teams across government have a big impact on government legal costs and legal capacity.

And those costs are significant: in the 2010-11 financial year, Commonwealth legal expenditure reached $676 million, split roughly evenly between internal and external spending.

That’s why I’ve titled my speech “Delivering the benefits while avoiding the risks”. There are undeniable reasons why in-house teams make sense, not least the efficient use of taxpayer dollars. But there are risks, too – maybe the lions I mentioned earlier – that you face every day: potential compromises to your independence and objectivity that mean in-house teams and Counsel must be always on guard against complacency.

And beyond your own team and agency, it is a task for Government to ensure the benefits of in-house teams are not simply short-term savings leading to long-term costs.

This includes recognising that a strong, cost-effective, sustainable Australian Government Solicitor remains vital to government legal work. In-house teams and the AGS must complement each other, in a competitive environment – a balance that is sometimes difficult to achieve in practice.

This morning I’d also like to discuss recent examples of where in-house teams have contributed strongly to the Government’s policy agenda, and responded swiftly to major decisions.

And I want to outline some structures this Government is putting in place that will ensure you are able to work in a strong, supportive environment with appropriate oversight and career development opportunities.

The role of in-house government lawyers

As Government lawyers you are uniquely placed, both within the legal profession and within the Australian Public Service. The expectations on you, and the environment in which you operate, sets you apart from your colleagues in the legal profession more broadly.

In recent years, there has been significant growth of in-house government legal practices. Your practices provide vital services to agencies and to the Commonwealth more broadly. However, as recent reviews of government legal expenditure have acknowledged, the largely uncoordinated expansion of government in‑house practices has also created some problems.

For example: potential inefficiencies and duplication of legal advice.

This in no way intends to undermine the importance of independent practices within Commonwealth agencies. Government lawyers are critical in supporting individual agencies strategic objectives.

You have an intimate understanding of your agency’s business, and can contribute significant value to your legal advice using your subject matter expertise.

However, the Attorney considers the Australian Government as a whole must be better equipped to draw on your expertise. The key, as always, is to ensure that lawyers across the Commonwealth are better connected to each other and to the role of the Attorney-General as First Law Officer.

Government lawyers should be connected with their practice area and agency’s executive – that’s the best way to ensure you are responsive and providing high-quality, reliable advice – but more broadly be connected with the government legal profession and the Commonwealth.



Recent action involving in-house teams

The Attorney-General, as First Law Officer of the Commonwealth, is the government’s principal legal advisor, with a special obligation to ensure the government complies with the law.  This of course makes her role quite distinct from that of any other Minister, with additional requirements and considerations to take into account.

This combination of Ministerial and First law Officer duties was brought into sharp relief in the Government’s response to the High Court’s decision in Williams.

I think more than a few of you are still having nightmares about this decision and its aftermath!

For those of you without a shiver going up your spine at its mere mention, Williams involved a challenge to the constitutional basis for the Commonwealth's activities and expenditure in relation to the National School Chaplaincy and Welfare Program.

The Government conducted extensive contingency planning for a wide range of possible outcomes, particularly analysis by in-house teams as to portfolio programs potentially at risk in the event of an adverse decision.

In the event, the High Court judgment invalidated an agreement made by the Commonwealth under the National School Chaplaincy Program by a 6:1 majority – but with split reasoning amongst the majority.

The Williams decision overturned the understanding on which the Commonwealth had acted since federation, that the Commonwealth could develop and administer spending programs without the need for legislative authority for those programs.

To put it frankly, this was not the result the Government expected – but it was one that the government was prepared to address.

The Attorney recently referred to the Government’s response, involving drafting and enacting legislation within 8 days of the decision, as extraordinarily efficient, and sensibly pragmatic - but a bit lucky too.

The efficiency lay with the in-house teams at the forefront of the response, alongside colleagues from AGS and the acting Solicitor-General, and parliamentary drafter (apparently drafting in shifts, which creates a vision of a Dickensian workhouse!).

The Attorney, of course, had a dual role of interpreting the implications and leading the Executive response to the decision.

And the luck resided in the timing of the decision itself, with a week of Parliament to go ahead of a long break. Had Parliament not been sitting for an extended time, what would the public officials spending money on these other programs have done?

Another of the topical issues facing government lawyers right now is the Government’s defence of legal challenges to the plain packaging of tobacco products, a world first tobacco control reform which the Government introduced last year.

This is an excellent example of where in-house teams, AGS and counsel have worked together for a common goal.

The Tobacco Plain Packaging Act 2011 requires all tobacco to be sold in drab dark brown packaging, with no industry logos, brand imagery, colours or promotional text, from 1 December this year.  Plain packaging eliminates one of the last remaining avenues for tobacco companies to market their products.

As you will no doubt be aware, the tobacco industry has launched a concerted legal campaign to fight plain packaging.

The Government is defending itself in the High Court, WTO and the Permanent Court of Arbitration.

While investor-State disputes are relatively common in other regions, this is the first time one has been brought against Australia.  This is just one example of the sorts of evolving issues being faced by government lawyers in AGD, DoHA and DFAT.

Commonwealth Legal Services Reforms

Figures on Commonwealth legal services expenditure have captured the media’s attention over the last couple of years.

As mentioned earlier, the 2010-11 Commonwealth Legal Services Expenditure Report showed that Commonwealth agencies spent  $676 million on legal services in the last financial year.  To break this figure down, Commonwealth agencies spent $365 million on external legal services and $311.5 million on internal services.

This is taxpayers’ money and it’s important we ensure that we actively pursue whole-of-government reforms to reduce that expenditure.

I acknowledge that this raises a significant challenge – on the one hand we need to reduce what we spend. While on the other, we need to ensure that the Commonwealth continues to receive high quality advice, delivered on time, and on budget.

The Legal Services Multi-Use List is a key part of the reforms the Australian Government is rolling out to enhance the delivery and management of legal services.

Ultimately, this reform will help the Australian Government get value for money when purchasing its external legal services through cutting red tape and driving cost-efficiency.

You might be familiar with the Gruen report. The report found that in the 2009-10 financial year, a staggering 89% of professional fees were earned by just 10 law firms.

The Gruen report suggested that the high proportion of fees to such a small number of firms was largely due to the way legal panels acted as a barrier to entry into the Commonwealth legal services market.

This situation led to duplication in tendering costs with some 72 legal services panels being established across the Commonwealth. It is estimated that each panel cost agencies an average of $120,000.

The Legal Services Multi-Use List addresses this unnecessary duplication by centralising the pre‑qualification of legal services providers to the Australian Government.

It should also make your job easier – instead of your agency or team having to go through extensive tendering for each piece of work, the list will allow to spend more time ensuring work is allocated efficiently and according to expertise internally and externally.

While many of you will not be required to start using the List immediately, this new-found flexibility will allow you to scope the market and start to draw on the benefits of the List during the transition period.

Another key feature of the List is that it provides a platform for sharing information at a whole-of-government level. Agencies from across the Commonwealth can now easily exchange notes on the performance of listed law firms.

Increasing information sharing will enhance the Commonwealth’s role as an informed purchaser of legal services. Becoming an ‘informed purchaser’ of legal services is yet another example of the unique set of skills government lawyers are required to possess.

Government Legal Network

Another key element of the reforms includes the establishment of an Australian Government Legal Network. This reform is designed to enhance existing legal and practice management skills across government, and to attract the best lawyers to the public sector.

I am very pleased to announce today, on behalf of the Attorney, the appointment of nine members who will make up the first Australian Government Legal Network Board. They are:

Ms Libby Carroll - Principal Lawyer, Murray Darling Basin Authority;

Air Commodore - Paul Cronan – Director‑General, Australian Defence Force Legal Service;

Mr Anthony Field - Chief Lawyer, Department of Families, Housing, Community Services and Indigenous Affairs;

Ms Elissa Keen - Deputy General Counsel, Australian Competition and Consumer Commission;

Ms Liesl O’Meara - Special Counsel to CEO Defence Material Organisation;

Mr Cliff Pettit - Executive Director, Legal, Office of the Fair Work Building Industry Inspectorate;

Ms Janean Richards - Assistant Secretary, Attorney-General’s Department;

Ms Janine Webster - Chief Counsel, Office of the Fair Work Ombudsman;  and

Mr Brett Walker - General Counsel, Commonwealth Scientific and Industrial Research Organisation.

The appointed members have an impressive range of skills to bring to the Board.  I congratulate them on their appointment and welcome their contribution to establishing the Network.

While there is still a way to go to build a better practice model in the Commonwealth and this Government is committed to progressing important reforms to delivery of legal services both by, and to, government agencies.

The introduction of the Legal Services Multi-Use List and the establishment of a network for government lawyers are obviously steps in the right direction.

Court and AAT reform

The last significant reform I would like to touch on today is reform of our judicial and administrative review systems.

Many of you engage in litigation on behalf of your agency, so you have a direct interest in a strong, functioning, reliable and efficient court system.

The Attorney have been working with the federal courts to implement a reform agenda to foster openness and transparency, accessibility, efficient administration and timely resolution, as well as introducing legislation to establish the new Military Court of Australia, and Bills to provide a clear complaints-handling process against Judges.

You may also be aware that the Government recently released the Skehill review into agencies within the Attorney-General’s portfolio, including the AAT.

The Government supports the Review’s recommendation to establish a forum encompassing the five major Commonwealth merits review tribunals to identify initiatives for further efficiencies between them.

The Attorney has also appointed a new President of the AAT, the Hon Duncan Kerr SC, to lead this forum and to take an active role in spreading best practice amongst all Commonwealth administrative tribunals, as well as leading culture change within the AAT itself.

Conclusion

With that, let me bring my remarks to a close.

You have a splendid lineup of speakers ahead over the next two days. Your next presenter, Christopher Behrens, has kindly shared with me his paper on Alternative Dispute Resolution and its role in timely resolution of disputes. He will make some powerful points about the impact of delays – a reminder of Gladstone’s great maxim: ‘Justice delayed is justice denied’. Christopher’s discussion of how effective ADR operates also made me recall a quip my ADR lecturer used to describe high-powered contract mediations in Sydney. To choose a mediator, each party writes down in order the ten people they would most like to have facilitate their dispute. Then they choose Sir Laurence Street.

On behalf of the Attorney, I thank you for your hard work and dedication in delivering high-quality legal services to your portfolio and the Government. We appreciate the time that goes into preparing various reports, such as reporting on significant issues to the Attorney-General’s Department.

The key message I would like to leave you with today, is that there is one government legal profession. As individual lawyers and practices across the Commonwealth, we must work more collaboratively with our colleagues in other agencies to continue to provide world-class legal services to Government.

Thank you and enjoy the rest of the conference.