Labor has replaced its candidate in the federal Victorian seat of Higgins with a high-profile barrister in a move that shows the Liberal stronghold could be at risk of falling for the first time.

The incumbent MP for the affluent inner Melbourne electorate, the cabinet minister Kelly O’Dwyer, announced her resignation from politics in January, citing hopes to spend more time with her children.

Fiona McLeod SC is replacing Josh Spiegel as Labor’s candidate. The opposition leader, Bill Shorten, hailed McLeod’s recruitment, saying she was one of the “most credentialled women” running as a candidate in Australian politics.

“I’m going to utter some words I didn’t think I’d say as Labor leader. It’s great to be here in the seat of Higgins,” Shorten told reporters in Malvern on Friday. “We’re presenting to you an almost unique candidate. I think it will be very exciting.”

Shorten noted “a mood for change” in the seat, amid the “unstable rabble” of the government and three prime ministers in four years.

McLeod has headed up legal teams in the Victorian bushfires royal commission, Queensland floods commission and the royal commission into institutional responses to child sexual abuse.

She’s also represented human trafficking victims, is a former president of the Law Council of Australia and is chair of Transparency International Australia’s board.

McLeod said the nation was at a tipping point and she was inspired to enter the “hurly-burly” of politics because she’s concerned about the kind of world that will be left to her daughters, amid inaction on climate change.

“It’s been something that’s been on my radar for a little a while,” she told reporters.“In my work as a lawyer I’ve been very conscious of the need for decent people to be in politics working to make a better Australia for all of us.” Indigenous affairs is also an issue close to her heart.

McLeod admitted she only joined the party last week but talked up close ties including her godfather, the late Andrew McCutcheon, who was a former Labor state attorney general. She also acknowledged she is presently not living in the electorate but is considering moving there.

Shorten and McLeod thanked Spiegel for graciously stepping aside, saying the young man had a bright future.

McLeod will be up against the paediatrician Katie Allen, who is running for the Liberal party, and the Greens’ star candidate, the former AFL player and anti-homophobia campaigner, Jason Ball.

Ball had a 1.9% two-party preferred swing towards him at the 2016 election and registered a 25% primary vote. O’Dwyer was re-elected on a margin of 8%.

The Liberal party has held the blue-ribbon seat of Higgins since it was established in 1949 and past MPs include the former treasurer Peter Costello and the ex-prime ministers Harold Holt and John Gorton.