AGS’s new internal charging model began on 1 July 2019
On 1 July 2019, in accordance with a decision of Government, AGS moved to an internal charging (or cost-recovery) model.
AGS aims to set its rates and otherwise charge for its work so that, over the course of a business cycle, it recovers the money it needs to operate efficiently and effectively as a self-funded legal service. AGS no longer aims to make a profit.
Before this change, AGS was required by Government to operate on a for-profit basis and to make sufficient money to cover competitive neutrality payments and to pay dividends.
The Australian Government Solicitor Michael Kingston said, 'I hope that this change to the AGS operating model is a catalyst for an increasingly close and collaborative working relationship with our clients, in which we combine our knowledge, experience and perspectives to address the key legal issues faced by Australian Government agencies and to better manage Commonwealth legal risk more broadly.'
The move to internal charging removes barriers to collaboration between AGS and Commonwealth agencies and consequently improves management of Commonwealth legal risk and whole-of-government issues. The change is consistent with AGS not being just another external legal service provider, but rather being:
- the Commonwealth’s central (and internal) legal service
- a centre of excellence and expertise in areas of law of importance to the Commonwealth and in managing complex, systemic or precedential issues for the Commonwealth.
In accordance with the Secretary’s Review of Commonwealth Legal Services, it is proposed that the Secretary of the Attorney-General’s Department, with the assistance of an independent expert, will review AGS’s cost structure periodically to ensure accountability in the setting of rates.
Information on the move to internal charging has now been distributed to our clients. If you would like to discuss what this means for your agency please contact us.