The Upshot
The experience level of your city’s staffers could be a contributing factor in the amount of legal fees you spend. That’s according to a recent analysis of legal fees in California, which also showed that poorer cities spend more than richer ones.
So What?
The analysis, conducted by the Los Angeles Times, illustrates an oft-overlooked fact: Cities that are more aggressive in reviewing legal bills—and have the knowledgeable staff to do so—pay less than others. This issue is critical as cities look to lower legal bills during tough economic times.
The Skinny
The L.A. Times article was related to analysis of a bond sale in 2010. According to the Times, literally hundreds of California cities signed up, and each city council approved the same set of documents. Here’s how much some of the cities paid:
Paid Less:
- Upscale Mill Valley in Marin County: $0.00
- Hermosa Beach: $93.50 for 30 minutes of work
- Moorpark: $127.00 for 42 minutes of work
Paid More:
- Upland: $746.20
- South El Monte: $3,625.00
- Calimesa: $2,058.00
- Irvine: $2,340.00
According to the Times article, at least one city—Upland—has since severed its relationship with its law firm due in part to cost issues.
Cutting Costs
According to experts, there are several important elements to lowering legal fees:
- Vigilance: Regular, careful oversight outside law firms is critical to smaller bills. To some extent, regular oversight and review yields a “deterrent” effect, as one legal expert told the Times, as outside firms know your city will be analyzing and questioning all costs.
- Guidelines: Legal fee expert Ken Moscaret told the Times that regular processes—such as a monthly review of legal bill—helps avoid high tabs that ultimately cause problems.
- Oversight: Larger cities often assign an in-house oversight lawyer to keep tabs on the outside firm, and make sure that certain legal moves are necessary and cost-effective; for example, outside firms can conduct expensive research that may not be necessary.
- Forensic Auditors: For larger bills, it is not uncommon for cities to hire forensic specialists to audit law-firm bills. Those audits can identify disputable charges, and can send a powerful message that your city is serious.
- Experience: Perhaps most importantly, the L.A. Times review correlated experience to costs. For cities that had dealt with plenty of bond issues, for example, little labor was required. But for cities in which staffers hadn’t experienced many bond offerings, they typically “peppered” their attorneys with questions, which increased costs. In other words, it’s not just about the experience of your legal team, but rather the experience of your city staffers who might inundate the lawyers with novice or “rookie” questions.
Helpful Resources
The state of Arkansas published a “Local Governments Handbook” that included a section on working effectively with your attorney (page four). Among their recommendations: Be clear about the problem, organize documents so they don’t have to, get itemized estimates for all work, and insist on itemized monthly billing “broken into tenths of an hour describing work actually performed.”
Though not focused specifically on legal work for municipalities, these “Nine Keys to Controlling Costs” by a Seattle-based lawyer are actually on point; he recommends—among other things—considering “alternative fee arrangements” that meet your specific needs.
Some other interesting recommendations came in a recent article on Atlantic City, which has been working aggressively to reduce legal fees. Among the tactics being used there: consolidating firms the city uses, and going after plaintiffs to recoup the city’s legal fees in cases that end in the city’s favor.
Another document worth reviewing is, “The Art and Science of Managing Legal Services,” which was originally published in 2006. The “Money Saving Ideas” on page 5 will be of particular interest, and echo many of the suggestions above.
If you have other tactics for saving on municipal legal fees, we’re eager to hear; contact us at editor@efficientgov.com.