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Wednesday, January 23, 2013

Ind. Gov't. - Many agencies use outside counsel rather than Attorney General

Catching up again, some of the details in this lengthy Dec. 23rd Fort Wayne Journal Gazette story by Niki Kelly surprised me. Some quotes:

INDIANAPOLIS – The Indiana Attorney General’s Office has 144 lawyers on staff but in the past few years has approved more than 150 contracts for $39 million worth of outside legal counsel.

The hired law firms are working on a variety of litigation, such as the State Fair collapse lawsuit, defense of the school voucher program, complying with federal highway-building regulations and defending medical malpractice cases.

Chief Deputy Attorney General Gary Secrest approves the outside counsel requests from other agencies and points out they represent a small percentage of the state’s overall legal work. * * *

Cases that aren’t sent out, meaning they will be handled by the staff in the Attorney General’s Office, include defending criminal conviction appeals, professional licensing actions and standard civil rights cases.

Other matters – like writing or complying with state or federal rules and regulations; constitutional lawsuits; or out-of-state collections – often involve use of outside counsel.

The Journal Gazette requested four years worth of information regarding outside legal contracts approved by the office. A database of related documents was turned over, sometimes going back further than 2009 because of amendments to pre-existing contracts. Most of the legal contracts are negotiated using a cap for services.

Secrest said often it’s all about expertise. If his deputies don’t have skills in a certain area of law, it might be best to seek an outside attorney. Or, he noted, if a case is so large that multiple attorneys will be needed full-time, it makes sense to ship the work outside.

The Attorney General’s Office itself uses outside counsel most often – more than 40 times in recent years at a cost of almost $7 million.

The Family and Social Services Administration has called for outside help less often but has spent more – about $16 million worth of contracts.

The Indiana Department of Transportation and Indiana Department of Insurance also ranked high for outside counsel contracts.

The process is generally that the state agency sends a request to the attorney general to hire outside counsel. The request itself is not public record but the approval letter and contracts are.

Secrest said if the Attorney General’s Office handles a case under normal circumstances, the costs would come from that office’s budget. But when outside counsel is sought by an agency, then that agency has to pay for the legal services out of its budget.

“Ultimately, it’s all taxpayer dollars,” he said.

IBM litigation

The biggest case in recent years to use outside counsel was when the state sued IBM over a $1 billion contract to modernize Indiana’s welfare intake system. The state was then countersued.

The Barnes and Thornburg contract for work on that case has now topped $10 million, and the state lost the initial ruling, which is under appeal.

Michael Carter, general counsel for FSSA, said outside counsel was needed in the case because of the sheer volume of the litigation, not to mention expertise in contract law. * * *

The attorney general’s largest contract dates to 2007 and has been amended eight times since. Lewis and Wilkins was hired to handle state tort claims, and the contract now totals $3.4 million. Tort claims are lawsuits filed against the state, such as wrongful death cases stemming from highway fatalities.

The contract was originally bid out competitively but was controversial because the winning firm is made up of two former deputy attorneys general. The contracts’ size has grown each year. Both men were recently sworn as Special Deputy Attorneys General to represent the state in litigation arising from the Indiana State Fair stage collapse. * * *

Corbin noted several outside counsel contracts are expiring in 2013. Because other firms haven’t shown an interest – and the office doesn’t want to switch attorneys in the middle of the State Fair case – Lewis and Wilkins’ contract will be renegotiated.

Other Indianapolis law firms that received a large amount of outside counsel work include Faegre Baker Daniels; Ice Miller, Bingham Greenebaum Doll; and Perkins Coie. * * *

One agency you might not expect to have a lot of outside legal work is the Department of Insurance. In recent years, though, the federal health care law has required some rate analysis and other legal work.

And outside counsel also handle the Indiana Patient’s Compensation Fund, which provides medical malpractice payouts to Hoosiers.

Tina Korty, general counsel for the Department of Insurance, said the agency pays out twice a year, and each time there are about 75 claims. A maximum claim could receive more than $1 million.

She said the payout has almost doubled, which has made the cases more difficult to handle.

The agency has four in-house attorneys, but that is not enough to keep up with the demand of the fund. So they also use outside firms. * * *

Secrest said he has not approved only a few outside counsel requests – three in the database given to The Journal Gazette. And if a conflict is found with the outside firm, the state has to waive that conflict to hire.

For related posts, see this Sept. 16, 2012 ILB entry where the Attorney General was reported by the IndyStar as stating "he will reassume responsibility for Department of Child Services appellate court cases in the wake of a controversial attempt by DCS to block a newspaper from publishing information about a call to the agency’s child abuse hotline."

See also this Sept. 9, 2012 ILB entry which took a close look at the role of the Indiana attorney general.

Posted by Marcia Oddi on January 23, 2013 01:25 PM
Posted to Indiana Government