Auckland Council has announced the results of an innovative legal procurement process that will reduce the council’s current external legal spend by 10 per cent to 20 per cent across key service lines.
In June 2017, Auckland Council launched a Request for Proposals (RFP) for legal services procured by the council.
Previously, external legal services were procured from a wide range of firms on a job-by-job basis.
However, in an innovative approach focusing on increasing value for money and efficiency, council sought contract pitches for 13 workstreams across its commercial, property, public law, litigation, regulatory and prosecution responsibilities.
The market response was extremely positive, with 30 substantial responses received, many of which included significant innovative delivery, pricing and added value options. Council staff undertook a thorough criteria-based assessment, with oversight from its internal audit team, leading to negotiations with shortlisted firms and final approvals by Council’s Strategic Procurement Committee in December 2017.
Auckland Council’s intention was to implement a ‘contracted provider model’, which reduces the number of firms used, obtains better pricing, and delivers innovation and added value in service delivery and risk management. The successful firms are now under 2+1 year contracts, with a performance management framework to ensure that council and the firms are working effectively together.
The successful firms are: Anthony Harper, Brookfields Lawyers, Buddle Findlay, Chapman Tripp, DLA Piper, Heaney & Partners, Meredith Connell, Minter Ellison, Rice & Co, and Simpson Grierson.
This covers the majority of council’s legal procurement, with lawyers and barristers with expertise in specialist areas being independently engaged when required. Chapman Tripp, Meredith Connell and Minter Ellison remain on council’s existing Panel for PPPs and Alternate Financing Projects, and Mayne Wetherell remains a provider for Council’s capital markets and corporate finance work.
“The council operates in an environment where legal issues arise all the time, and how we manage those issues has a big impact on our community and ratepayers,” says Auckland Council General Counsel James Hassall.
“This procurement is a key component in delivering legal services successfully, and as cost effectively as possible.”
A particularly innovative feature of the procurement was adopting ‘fixed price’ offerings from three of the firms for several high-volume workstreams, including transactional property and commercial work, and regulatory litigation and enforcement.
This aligns firms to council’s priorities, with the focus on achieving cost-effective outcomes, rather than just billing for hourly time inputs. In other workstreams, firms have been retained on small panels, with a focus on continued value-for-money delivery during the contract term.
“We are thrilled with the results of the procurement process,” says General Manager Procurement Jazz Singh.
“From receiving the initial proposals in July we have engaged in a robust vetting process and some complex negotiations. I am confident that these contracts will achieve significant cost savings in our annual legal expenditure,” Mr Singh says.
“We’re looking closely at how we can extend this model for other professional and consultancy services.”
The combined value of these contracts is approximately $16 million (including weathertight building litigation) and is expected to save 10 per cent to 20 per cent of Auckland Council’s current external legal spend across key service lines.