News that the Attorney General is considering wholesale changes to the procurement of governmeny legal services will have senior partners feverishly reviewing the termination clauses of their panel appointments.

With the federal Labour government back in power, our zany forward-thinking AG Robert McClelland looks set to continue his reformist agenda. First on the hit-list is the way the government buys legal advice. "We need to do a lot to rein in what has become a quite fragmented system of acquiring legal services at a commonwealth level",  the AG told the Australian this week.

In order to centralise the buying process - and cut down on its $555m legal bill - the AG is considering creating government-wide panels across areas such as employment law, commercial leases and property law. The panels would see the end to ad hoc instruction of law firms and introduce some serious competition for panel places. And it's not just the private sector lawyers who will be quaking in their boots, the AG has his eye on what he is calling the "great proliferation" of in-house lawyers within government. So it looks like a slimming down all around.

Lawyers react to news of the AG's plans

This shake-up has been on the cards for a while and shouldn't come as much of surprise to firms. A cabinet report three months' ago noted that individual departments had been buying retirement homes for their favourite lawyers spending too much cash on legal services for too long.