Requiring AGs to seek bids for outside counsel

This week, the Missouri Lawyers Weekly [subscription required] reports on a proposal to require the attorney general to seek bids when hiring outside counsel, which could have a significant impact on government use of private firms to prosecute public nuisance cases and other actions on behalf of the general public.

The proposal was apparently motivated, at least in part, by a concern that the current Attorney General (Jay Nixon) awarded lucrative contracts to outside law firms that later donated heavily to the AG's war chest in his campaign to be elected governor.  For example, the article says Nixon's office approved a team of outside attorneys to handle Missouri’s case against tobacco companies about a decade ago; they reportedly spent about five months before a national settlement was reached and collected a fee of more than $111 million, to be paid over 25 years, for their efforts.  (This fee was discussed in a Missouri appellate decision.)  The team (led by attorney Thomas Strong of Strong Garner Bauer) logged almost 30,000 hours, which comes to nearly $3,800 per hour.  According to the article, the firm turned around and donated $180,000 to Nixon’s campaign for U.S. Senate in 1998.

As stated in the article, "State government generally seeks bids when it needs to acquire a host of things, from vegetables for state prisons to updated fire alarm systems. But the law does not require state agencies to competitively bid for outside legal services, though they can choose to do so."  If approved, the new measure would set up not only competitive bidding, but would also require private lawyers to track their hours worked and make such documents public, would limit billing rates to no greater than $1,000 per hour, and would require legislative approval for contingent fee contracts of more than $100,000. 

These seem like reasonable conditions for routine cases in which an outside firm represents the state in a traditional role as a party litigant, as in a breach of contract case.  But, in cases where the outside firm is to represent the government as the plaintiff in cases asserting sovereign rights on behalf of the general public (as in public nuisance actions), one could argue that the provision allowing for contingent fee contracts doesn't go far enough to remove the conflict created when an attorney has a private financial stake in the outcome of the inherently public litigation.  Such litigation requires an unbiased evaluation throughout the life of a case to determine whether and how a monetary remedy should be pursued, taking into account a balancing of all competing public interests.  As mentioned in a prior post regarding Santa Clara v. Superior Court and contingency fees, the propriety of contingent fee agreements in such a context is pending before the California Supreme Court