Setting and negotiating Commonwealth Counsel rates – Guidance
Material for Agencies
Overview
The Legal Services Directions 2005 (the Directions) require that to be engaged to perform
Commonwealth legal work, counsel must have an approved Commonwealth rate
(paragraph 4E).
OLSC has previously approved all initial and increased rates, consistent with the policy of
exerting maximum downwards pressure on rates. This guidance material reflects the
amended policy to streamline this process and enable agencies who are engaging counsel in
accordance with the Directions to make their own informed decision about the rate of
engagement below certain thresholds. Rates above the thresholds will still require approval
by the Attorney-General or his or her delegate.
When counsel rates may be negotiated
OLSC will set an initial Commonwealth rate on application by an agency or counsel, as is
currently the case. If a Junior Counsel who has an initial rate approved takes silk, OLSC will
set an initial rate for Senior Counsel. Once an initial Commonwealth rate has been approved
by OLSC, it is open to an agency and counsel to negotiate a different ongoing rate for a
particular brief (paragraph 5 of Appendix D the Directions). However, there is no expectation
that a rate be negotiated in each individual matter – the default position should be that the
most recent rate approved by OLSC or agreed between Counsel and the Department would
apply.
An agency may negotiate a rate up to the threshold limit of $2,300 (inclusive of GST) for
junior counsel and $3,500 (inclusive of GST) for senior counsel.
Factors to consider in negotiating a rate
When negotiating a new rate, an agency should take into consideration:
• Counsel’s current rate and the year it was approved
• The per annum increase amount (the calculation)
• Any special circumstances of counsel
• Any special circumstances of the matter
• Value for money
Counsel’s current rate and the year it was approved
An agency should first look at the last approved rate by OLSC to assist in negotiating a
different rate. If the rate is above $2,300 for JC or $3,500 for SC, the agency must apply to
OLSC for any increase of these rates.
The agency should look to the year the rate was approved. For example, for a JC with
10 years’ experience whose rate was set 5 years ago, it may be reasonable to increase the
rate by 5 times the per annum increase amount, reflect counsel’s additional experience. If
counsel has taken silk and moved to senior counsel since their last rate was approved, the
agency should apply to OLSC for an initial senior counsel rate.
There may be circumstances where a higher or lower rate is appropriate (see further below).
The per annum increase amount (the calculation)
As a general rule, agencies should apply a per annum increase for each year since the last
rate was set. The current year is taken as 1 year of experience (ie in 2014, a 2014 JC has
1 year experience, a 2013 2 years’ experience, etc).
For both junior and senior counsel, apply a $75 per annum increase.
For example: John is a 2005 JC. His last rate was $1,250 per day and it was
approved on 30 July 2007. As it is 7 years since his rate was last approved, John’s
rate should be calculated as follows:
• Increase: 7 years at $75 per annum = $525
• New rate = Current rate ($1,250) + increase ($525) = $1,775
John’s new rate should be $1,775 per day unless there are special circumstance that
would warrant a higher rate.
Special circumstances of counsel
It may be appropriate to negotiate a higher rate for counsel if there are special circumstances
about the counsel the agency wishes to engage.
Agencies should not feel obliged to consider special circumstances, either of counsel or of the
matter. Agencies’ default negotiation position should be counsel’s current rate and any per
annum increase.
Any additional increase based on special circumstances should not be considered unless
actively sought by counsel. This will maintain consistency across the practice of agencies and
ensure agencies and counsel are not required or expected to negotiate rates in each
individual matter.
Special circumstances of counsel that may be relevant include:
• Counsel’s particular experience in the legal subject matter
• Other experience that would be particularly valuable to the agency
• Location of counsel (eg Papua New Guinean practice)
• Availability - no other suitable counsel may be available.
Special circumstances of the matter
The specific matter may also bring up a number of additional circumstances that lead to a
higher rate for counsel being appropriate. Special circumstances may include:
• The matter is sufficiently important to the agency to warrant a high rate – this may
be because the matter would set an important precedent or be of novel value
• The location of the matter (eg rural Australia)
• Length of the matter – eg Royal Commissions are significantly long
Value for money
Agencies are ultimately responsible, in accordance with the Directions, the Commonwealth
Procurement Rules and the
Public Governance, Performance and Accountability Act 2013, for
obtaining value for money when engaging counsel.
Agencies should actively seek to keep Commonwealth legal costs down in recognition that
and Commonwealth work is often regular or high profile in nature and that the
Commonwealth always pays its bills. Commonwealth rates are generally significantly lower
than counsels’ commercial rates. Agencies should rely on the Commonwealth’s bargaining
power when negotiating rates with counsel.
When to approach OLSC
The Directions require OLSC to set an initial Commonwealth rate. An agency should approach
OLSC to set an initial junior counsel rate and then, if counsel takes silk, an initial senior
counsel rate. An agency or counsel must also approach OLSC to seek approval to engage
counsel above the threshold limits, on an ongoing or one-off basis.
Information required for requests between $2,300 / $3,500 and $5,000 per day
OLSC, acting as delegate of the Attorney-General, may approve a rate above the thresholds
in paragraph 5 of Appendix D and less than $5,000 a day. A rate over the threshold can be
for a one-off matter or set as counsel’s ongoing rate.
Most counsel should fall under the threshold unless there are specific reasons why
they should have a higher rate.
In making such an application, an agency should provide the following information to OLSC:
• the special expertise or skill of the counsel who is proposed to be briefed
• the availability of counsel general y to appear in the matter
• the specific request of an agency that a particular person be briefed and the
reasons for that preference
• the importance of the matter, including any special sensitivity; and
• the normal market daily fee at which the relevant counsel is briefed.
Information required for requests over $5,000 per day
The Attorney-General must personally consider proposals to pay senior counsel in excess of
$5,000 a day as required by paragraph 9 of Appendix D. A rate over $5,000 (one-off or
ongoing) is only permissible in exceptional circumstances.
In considering rates above these thresholds, the fol owing factors contained in paragraph 10
of Appendix D wil be taken into account, and should be supported by correspondence from
the Chief Legal Officer (at SES level) of the requesting agency:
• the special expertise or skill of the counsel who is proposed to be briefed
• the availability of counsel general y to appear in the matter
• the probable total cost of counsel’s fees in the matter
• the specific request of an agency that a particular person be briefed and the
reasons for that preference
• the importance of the matter, including any special sensitivity; and
• the normal market daily fee at which the relevant counsel is briefed.
