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Contracting for lawyers costs L.A.

Growing practice pits Riordan against Hahn

May 20, 1996

By CHIP JACOBS
Daily News Staff Writer

With the Riordan administration encouraging the practice, the Los Angeles City Attorney’s Office is turning increasingly to private lawyers to tackle some of the city’s thorniest legal issues – at mounting cost to taxpayers.

The use of outside lawyers has put Mayor Richard Riordan’s office and City Attorney James Hahn at odds, while reviving the question of how much City Hall should use hired legal guns instead of in-house lawyers.

For the first 10 months of this fiscal year, the city has obligated itself to pay $8.2 million to outside firms working on cases involving sexual harassment, pensions, real estate, bankruptcy and airport matters, records show.

In the past four years, the annual bills for private attorneys were in the range of $5 million to $7 million, according to documents from the City Attorney’s Office.

Outside counselors are billing the city $105 to $350 her hour. A midlevel deputy city attorney pockets about $70 an hour with benefits, records show.

Declaring that too much legal work is being farmed out, Hahn compared the practice to an addiction – the more the city contracts out, the harder it is to stop.

“It gets to be like heroin,” Hahn said in an interview. “You get hooked because you can’t develop the resources in-house, so you contract out. We need to go through withdrawal.”

Steve Sugerman, the mayor’s assistant chief of staff, conceded that the Riordan administration has in some cases encouraged the use of private attorneys. But he said the practice is hardly new – particularly in high-stakes cases.

“It’s a longstanding practice in this city and every other major one that when there’s a major financial exposure or a legal matter requiring specific expertise, the city consults with outside counsel,” Sugerman said. “It’s important to put this into context.”

Hahn and others, however, said sending so much work outside has demoralized rank-and-file city attorneys, preventing them from developing expertise in crucial areas for the city, such as bankruptcy, intellectual property and employee relations.

Riordan’s office, Hahn and Sugerman agreed, asked for an outside firm to defend the Department of Water and Power against a suit challenging the DWP’s transfer of millions of dollars to the city’s general fund last budget cycle.

More recently, the Riordan-appointed Airport Commission tapped a pair of firms to help it with a master plan at Los Angeles International Airport.

Hahn acknowledged that, as required by law, he and the City Council approve all outside contracts. He said, however, that he had no choice because of heavy caseloads and tight budgets.

“There’s an attitude (from Riordan) that if you want a really good lawyer, you have to go out and hire one because you won’t find one working for the city or other government agencies,” he added. “That’s just plain wrong.”

With 360 attorneys and an annual budget of about $50 million, Hahn’s department prosecutes all criminal misdemeanors in the city, handles civil liability matters for municipal departments and advises the City Council and Mayor’s Office on a range of legal issues and laws.

Because of the workload crush, the city is paying private lawyers for scores of cases. Payments include:

At least $750,000 to defend City Councilman Nate Holden against sexual harassment charges leveled by a former staffer. Holden has prevailed.

$90,000 to help establish the L.A. Community Development Bank.

$3.5 million to defend the city’s decision to award a cable television franchise.

$885,000 to law firms and a consultant studying whether Department of Harbor funds can be diverted to the city’s coffers, as challenged in a state lawsuit against the city. One of the firms, O’Melveny & Meyers, charged the city $350 an hour for part of the work.

Airport Commission President Dan Garcia said the outside law firms working for the airport bring legislative and environmental expertise that overworked city attorneys don’t have.

“There’s no way on God’s green earth the city attorney was staffed to handle the landing fee and related issues,” Garcia said.

Garcia also suggested that Hahn’s criticism may stem from politics. Hahn is being challenged for re-election next year by Ted Stein, who led the Airport Commission for Riordan before Garcia’s appointment.

Moreover, Hahn’s disclosure that Deputy Mayor Michael Keeley released confidential legal documents – ultimately leading to Keeley’s decision Friday to step down – has also strained relations between Hahn and the mayor.

“It’s clear the political heat is up in the City Attorney’s Office to do whatever it takes to look good,” Garcia said.

Hahn denied that politics played any part in his criticism.

Councilman Mike Feuer, himself a lawyer, thinks it’s time for the council to debate the policy.

“Rather than farming them out, we could bring in (specialty lawyers) and build the most model City Attorney’s Office instead of eroding morale and siphoning out resources,” said Feuer, a member of the council’s Ad Hoc Budget Committee. “There are definitely legitimate cases to farm out, but I think the (numbers) are too high.”