City of Winnipeg staff did nothing illegal in a controversial fire hall land swap, but there is still the possibility of a lawsuit, lawyers told councillors on Monday.

The briefing regarding the city's legal exposure in the land swap controversy involving several fire halls concluded that staff did not break the law in the case.

Lawyers did recommend some changes to some of the city's procurement procedures.

An external review of the land swap by Ernst and Young said contracts were awarded to local development company Shindico on a non-competitive basis and deliberate moves were made to keep the deal out of the hands of council.

The report did not detect anything illegal in the land swap, but it directly implicated Phil Sheegl, who at the time was the city's chief administrative officer, in many of the issues with the deal.

The deal had come under heavy scrutiny by councillors, the public and the media before eventually being scrapped in late 2012.

After the audit report was released, council approved a motion by St. Boniface Coun. Dan Vandal to seek a legal opinion on how city administration handled the matter and whether any illegal activity may have been involved.