Report on the Audit of Managing Demand

4. Background

Authority

Internal Audit Services conducted this audit in accordance with the Departmental Risk-based Audit Plan 2015-16, which was approved by the Deputy Minister on June 25, 2015.

Introduction

The Department of Justice Canada (Justice) provides legal services to federal government departments and agencies across Canada. Steady growth in the demand, and corresponding cost, for these services led Justice to undertake a Legal Services Review in 2014 and commit to capping the total cost of Government of Canada legal services at $499.8M annuallyFootnote 2. Through the Legal Services Review, Justice, in partnership with its client departments and agencies (partner departments), launched a series of measures to improve productivity, cost effectiveness and business excellence of its operations.

Legal Services Review - Managing Demand Initiative

The Legal Services Review identified a number of specific measures to be implemented in two waves over a span of three years, beginning April 1, 2014. These measures sought to achieve savings by both reducing the demand for services and improving the efficiency of service delivery. Measures were divided into the following three commitment areas:

  1. Redefining the Justice-Client Partnership - Finding the right balance between supply and demand for legal services;
  2. Streamlining the Organization - Reducing overhead/indirect costs; and
  3. Managing Business Performance - Enhancing productivity and efficiency.

The first commitment area, "Redefining the Justice-Client Partnership," included one flagship initiative and three additional immediate measures. One such immediate measure, the Managing Demand Initiative (MDI), was identified as a critical element to contain costs. It focused on two key activities (each with their own deliverables):

  1. Working with partner departments to identify low risk, low priority work that does not require legal advisory support; and
  2. Enhancing the use of tools to help screen, triage, redirect and resolve requests for legal services.

The MDI was expected to result in A-base savings of $783,000 and net voting authority (NVA) savings of $2.93 million, resulting in a reduction of 25 full-time equivalents (FTEs) by 2016-17. The initiative was also expected to provide further annual cost avoidance savings of $2.25 million by 2016-17.

Three co-leads (Assistant Deputy Minister, Central Agencies Portfolio; Deputy Assistant Deputy Minister, Business and Regulatory Law Portfolio; and Regional Director General and Senior General Counsel, Prairie Region) were assigned responsibility for overseeing implementation of the MDI. They were supported by a small MDI team comprised of senior staff within the Central Agencies Portfolio.

Managing Demand Beyond the MDI

To ensure legal services remain fiscally sustainable, Justice must continue its efforts to manage demand beyond the completion of the Legal Services Review and the MDI. Various key governmental and departmental strategy documents, as well as communications from the Deputy Minister, reflect the importance of maintaining a longer-term approach to the management of demand for legal services.

The Clerk of the Privy Council’s Blueprint 2020 identified the need for the Government of Canada to take a whole-of-government approach to enhancing service delivery and value for money. For Justice, this whole-of-government approach entails working collaboratively with client departments as partners to design processes that support the delivery of key legal services while identifying services best delivered by other means.

Justice’s response to Blueprint 2020 – Canada’s Legal Team vision for 2020 – also calls for ongoing efforts to manage the demand for legal services. One of its objectives is "working with clients as partners" through "ongoing discussions … to define ’excellence’ and to identify priorities in order to reduce demand and improve efficiency in the delivery of legal services." The Deputy Minister has also emphasized that "to achieve business excellence, Justice needs to continue developing new processes to help screen, triage, redirect, and resolve requests for legal servicesFootnote 3."

Achieving this vision will require a change in how Justice does business, as Justice moves from a traditional client-service model to a partnership with departments in which both parties work together to contain legal service costs and meet government legal needs.

5. Audit Objectives

The objectives of the audit were to determine whether:

  • The deliverables of the MDI have been achieved (or are on track to be achieved); and
  • Adequate and ongoing mechanisms are in place to sustain progress and support a whole-of-government approach to containing legal service costs by better managing demand for legal services.
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