Get A Lawyer:
Whether hiring your own or
contracting with a firm, getting competent and affordable legal counsel in
today's litigious society is a necessity
(from Maine Townsman, August 1993)
by Jo Josephson, Staff Writer
You are about to negotiate a franchise agreement with a cable TV company.
You've drafted an ordinance instituting a curfew on minors, on regulating bed and breakfast establishments, on the spreading of sludge in your town.
You plan on firing an employee. You are being sued by a former employee.
Your biggest taxpayer is seeking a tax abatement.
It's time to call your attorney. But what if the local attorney you relied on for years is retiring. Or you suspect the case is beyond his or her general practice. Or the large firm that has handled your work for years isn't as accessible as you would like. What then? Is it time to shop around for a new attorney/firm? Or is it time to start thinking about establishing your own in-house legal department?
This article looks briefly at the different kinds of arrangements municipalities in Maine have in order to meet their legal needs. It looks at a number of issues one should consider when shopping around. It makes a case for in-house attorneys. It looks at the issues of cost and the importance of practicing "preventive law" in keeping costs down.
OPTION I: LEASING
All municipalities contacted for this article reported engaging in the practice of "leasing" attorneys, even those which had their own in-house full-time legal departments.
When not calling upon the MMA's legal department, those without their own in-house counsel regularly use the services of attorneys associated with large and small firms. Generally, but not always, the small firms provide general counsel for non-specialized nonlitigious work; the larger firms provide special counsel in cases where in-house attorneys or local attorneys have a conflict of interest or in cases that require special expertise.
A good example of the typical mix is the Franklin County town of Wilton, population 5,000. When it recently came to searching the title of land it was purchasing for its new water treatment plant, Wilton turned to its local "general practitioner," whose fees were 60 percent of that charged by the large Portland based firm it retained for the specialized work of negotiating the renewal of its cable TV franchise and the labor contracts of its police department and highway crews.
Another good example is that of Kittery, population 9,000, which has leased the services of the same local attorney for the past 20 years. Because of that tenure and because that attorney works for a 12-member firm, most of the legal work is done by that attorney. The attorney charges different rates for the different kinds of work he does. The town goes to other firms when the attorney has a conflict of interest or when it is going to issue a bond.
As noted above, leasing is not confined to municipalities without in-house legal resources. Bangor, which has two attorneys on staff (it hired its first full-time attorney in 1969), recently spent as much money on private attorneys as it did on its own legal department, according to Corporation Counsel Eric Stumpfel.
Federal regulatory matters associated with the city-owned airport and a lawsuit against the city over its wastewater treatment plant, recently forced the city to hire a Washington D.C. based law firm. Closer to home, the city used the services of a Bangor firm to handle union negotiations and workers compensation claims.
Advantage: "Depth of Resources"
All of which is to say, who you hire depends on what you need. As Lee Bragg, a former attorney with MMA's legal department, currently on the staff of the 60-member Portland law firm of Bernstein, Shur, Sawyer and Nelson sees it, the practice of municipal law is very broad. While a lot of the legal work he does is truly unique to municipalities (cable TV, public sector financing and labor law and code enforcement), a lot (contracts, real estate disputes, environmental and licensing needs) is not.
"It's impossible for one attorney to be well-versed in all areas of municipal law," says Bragg. As Bragg sees it, large law firms have a "depth of resources" (read experience and expertise) a client may draw upon. "That depth," says Bragg, "is critical for the client."
Bragg says that towns hire him specifically, not his firm. But they have access to the rest of his firm. While he does the majority of the work, he finds it to his client's advantage to involve someone else from his firm with more experience in an area about 20 percent of the time.
Conflict of Interest
Special expertise aside, avoiding conflict of interest is another reason municipalities often turn from their own legal department or a local firm to larger out-of-town firms. In-house staff often have their fingers in many pies, drafting the ordinance that is subject to an appeal process. Local firms are often caught in the web of local interests and developers.
"Generally it's easier to solve legal problems if you are not closely associated with the town. Be it politics or the independent perspective or the diminished risk of conflict, local officials appreciate the disassociation associated with larger out-of-towns firms," says Bragg.
But he warns that "Maine is a small state; it doesn't matter who you hire; there can always be a conflict."
Cost of Leasing
Bragg says how much a firm charges is "largely irrelevant." Clients always ask: "What is the hourly rate?" What they should be asking is "Can you do high quality work efficiently and economically?"
"If you are concerned about cost, look not at the hourly rate, but at the total cost. Equally important to ask is what are you getting for that total cost," says Bragg.
Attorney Karen Lovell, who works for the firm of Smith Elliot Smith and Garmey with offices in Saco, Sanford, Portland and Kennebunk employing 14 attorneys, agrees with Bragg. "Both the quality of service and the hourly rate should be considered," says Lovell.
"Municipalities should know they are valuable clients in this economy because they generally pay their legal bills in a very timely fashion. This puts them in a favorable bargaining position when seeking legal representation, says Lovell. As such, Lovell says her firm tries to be competitive by reducing all hourly rates (except that charged for litigation) by 25 percent when it comes to municipal work.
Private attorneys interviewed for this article noted rates ranging from $50 an hour for the services of paralegal staff to $95 an hour for the work of an associate member to as high as $150 an hour for senior partners.
Smaller firms which generally, but not always, charge less than larger firms, appear to be more flexible in the fees they charge. Kittery's attorney Duncan McAckeran, who works for a 12-member firm whose main office is in Portsmouth, New Hampshire, has been Kittery's attorney for 20 years, working out of the firm's local office in Kittery.
Because of his longevity with the town and because he lives in the community, McAckeran says he tries "to temper his work with the town's legal budget" and "changes his fees depending on what he is working on." His top rate is $100 an hour when he is doing court work for the town. He does not charge that rate sitting through a six-hour council meeting, he says. According to Phil McCarthy, Kittery town manager, not only does McAckeran have the history, he "cares about the time" (spent on the work).
OPTION II: OWNING
Only a handful of Maine municipalities, Bangor, Rockland, Westbrook, South Portland, Portland and Waterville, have their own attorneys on staff. Their legal departments range from a staff of one (Rockland and Waterville) to a staff of two in Bangor to five (one corporation counsel and four associates) in Portland.
Rockland, (population 8,000) hired its first full-time attorney Carol Maines two years ago, following several years of "significant legal costs" ($120,000 one year; $86,000 another year) in connection with a controversial subdivision, says City Manager Cathy Sleeper. Maines was hired away from the law firm that had been serving Rockland.
Portland (population 64,000) hired its first full-time attorney in 1974, in response to growing demands for legal guidance from its council, the manager, the department heads, all of whom in turn were reacting to demands imposed by federal and state government, according to Corporation Counsel Gary Wood.
"Because of its size, Portland's legal department operates like a small law firm," notes Wood. Each staff attorney is able to specialize, be it in the area of land use and zoning or personnel or parks and public works or finance and taxes. "They know the history, they know the personalities, they know the law," says Corporation Counsel Wood.
To reduce the chances for a conflict of interest, Wood says the department assigns different attorneys to the planning board and the board of appeals.
Advantage: "Preventive Law"
Whereas attorneys associated with large private firms tout their "depth of resources," and attorneys in small local firms note their longevity of service and sensitivity to local budgets, the in-house municipal attorneys point to their cost-saving practice of "preventive law." Because they are ever-present, they say they are able to avoid legal costs by avoiding legal problems in the first place.
By preventive law, Bangor's Eric Stumpfel says he means "preventing things from happening," in other words, doing it right, especially when it comes to firings. Making sure the facts in a termination constitute just cause, making sure someone's civil rights are not being trammeled upon.
As Rockland's Carol Maines sees it, where a department head would be reluctant to call upon the services of outside counsel because of the ticking clock, they would not hesitate to contact the town's staff attorney. "That ten-minute conversation saves a lot of money in the long run," says Maines.
Portland's Wood notes that the city's legal advisers to the city's 150-member police department are worth their weight in gold." "Liability costs there have been reduced to about $25,000 a year because the city has been able, through wise counsel, to avoid successful litigation claims," reports Wood.
Maines also points out that her preventive law practice for the city sometimes can backfire. "When we are not being sued left and right, when things are going smoothly, the council begins to wonder just what she does, forgetting that her role is to deter such law suits."
Maines goes a step further and says she not only practices "preventive" law but "restraining law" as well. She believes her very presence discourages frivolous and other lawsuits against the town. "Towns without their own attorneys are often inclined to settle under the very threat of an expensive law suit," she says, but because her presence engenders her with "bluff calling ability," she can often act to put someone on hold.
The practice of preventive law is not unique to the municipal legal departments. Ed Bearor, a former town manager of Newport who is now with the Bangor firm of Rudman and Winchell, has a unique approach to providing his clients with the tools they need to practice preventive law. He conducts training workshops for his client's planning boards, using MMA's Handbook for Local Planning Boards: A Legal Perspective as a basic text.
"Five hours of training are well worth one expensive lawsuit," says Bearor.
Cost of Owning
While salaries are important, they are not the only costs when considering establishing an in-house legal department. There are the law books and other publications necessary to a well run office, not to mention the cost of staff support and overhead.
That said, a quick look at the salaries of a selected few in-house offices follows: Bangor's Stumpfel is paid $ 45,000 a year, plus benefits; his associate earns $37,000 a year; the secretary earns $28,000 year. Stumpfel figures that the legal department's average cost per hour is about $50. The department's budget, exclusive of outside counsel, is about $165,000 a year. As Stumpfel sees it, "with an in-house legal staff, you get more hours for the money."
Portland's Wood, who is paid $54,000 a year, figures his department's average is about $43.86 per hour though he admits it is a conservative figure based upon 4.5 attorneys working 40 hour work weeks for 48 weeks per year but does not take in overtime compensation. His department's budget, exclusive of outside counsel, is currently $325,000 a year.
Rockland pays its sole staff attorney around $30,000 plus benefits,- it has no support staff. Waterville pays its sole staff attorney about $44,000 a year plus benefits; its current budget is about $60,000 a year, exclusive of outside counsel.
As noted above, the cost of in-house staff does not preclude the use of outside private law firms for special cases. Most report their costs for outside legal work to equal or exceed their in-house budgets.
SHOPPING FOR AN ATTORNEY
Before you go shopping for a new attorney, it is important to remember the value of continuity and consistency, says Rudman and Winchell's Bearor. Elected officials and managers come and go, attorneys don't, usually, unless you terminate your relationship with them.
Attorneys provide a municipality with what McAkeran, who has served Kittery for 20 years, calls "institutional consistency." Attorneys have the memory. They have the history. They remember or at least have the files. If you switch too often you may find yourself paying for the same advice you paid for once before, says Bearor.
SIDEBAR: Rising Legal Costs
A recent survey by the National Institute of Municipal Law Officers, a national association of municipal attorneys, produced the following statistics.
Word of Mouth: Shopping for an attorney to meet your legal needs generally takes two forms, says Jim Katsiaficas, [formerly] an attorney with Jensen, Baird, Gardner and Henry, with offices in Portland and Biddeford. There is crisis shopping: "I need someone yesterday." For that you are best advised to call the MMA or a neighboring town and ask them who they recommend for the kind of work you need, if they have used them, and if they were responsive and if the town got their money's worth.
Advertising: Then there is the leisurely form, where one truly "shops," where one requests formal proposals from firms for their services. While not everyone agrees on this latter approach, saying one should not use the competitive approach when hiring a professional but rather one should first and foremost look at qualifications, Portland's Wood says it was an effective tool several years ago when Portland was looking for outside counsel for work related to workers compensation, tort claims and certain civil rights claims.
Wood says they went to the RFP process "to control the overall cost of outside counsel and to add as much predictability as possible to the estimation of those costs." In issuing the request, the city let it be known that it was "interested in receiving proposals that express a willingness to keep costs down by using existing city resources and personnel."
"Not only did Portland get the best qualified firm, they also got a good price," says Wood.
Some Shopping Advice
1) Look for an attorney who has municipal legal experience. How many cases like yours has he or she handled in an average year? Who will be handling the city or town's work? Find out the number of cases settled, the average settlement amount, the average attorneys fees charged and costs incurred.
2) Seek an attorney who is accessible and responsive and keeps the town informed. Do they return phone calls? If it is urgent, can you break in on them if they are on the phone? Will you be given advance notice of times when the attorney will be unavailable (vacations, professional conferences, etc.) and the names of the attorneys who will handle affairs in their absence? Will they attend night meetings?
3) Look for an attorney who has a problem solving attitude and a healthy dose of common sense. The attorney should come up with potential solutions to a problem, instead of just saying "no." Most problems can be resolved by reasonable people using common sense. A law degree does not guarantee either.
4) Select an attorney who has a personality and style that fits the municipality and its officials. A good municipal attorney is someone you look forward to talking with and whom you can trust to give you an honest opinion, an accurate risk assessment and a number of available options.
5) Look for an attorney who will try to resolve an issue, if possible, without going to court, but who will be adept at litigating, if necessary. As Portland's Gary Wood sees it, "Attorneys who are quick to drop the gloves and get into adversarial confrontations are going to increasingly join the dinosaurs as people come to understand and appreciate the value of resolving their disputes in ways other than going to court."
6) Know how you are going to be billed. How is the lawyer going to bill travel time? Is the lawyer going to bill for every phone call? If you are hiring a firm, will you be double billed for conversations between attorneys?
7) Know who you are hiring. The firm or the individual attorney who works for the firm. It may just be a question of semantics. Because the bottom line with a large law firm is that you have access to all of the partners. It is important to ask: Who am I doing business with? Are you going to be doing our work? Will we be dealing with you? It is also important to say: We don't want to be shuffled off to someone else.
WORKING WITH YOUR ATTORNEY
1) Be sure you understand.
No one accepts things on blind faith anymore says Skowhegan Attorney Donald Eames, who has practiced municipal law for more than 40 years. Where in the past people were apt to say "He said so," people are more searching these days. They should ask their attorney to defend his reasoning, to explain in words they can understand, to break it down simply. Smith, Elliot, Smith and Garmey's Karen Lovell says "attorneys can be wrong; there is nothing wrong in getting a second opinion,"
2) Don't ask your attorney to make the decision.
There are many things one should expect an attorney to do, like return your calls as soon as possible, bill you regularly, etc., but the one thing you should not expect them to do is to make your decisions for you. Rudman and Winchell's Edmund Bearor says the appropriate role is to be an advisor not a decider. When he is asked by clients, "What should we do, I say, "It's not for me to say; I was not elected to make the decision." As Bearor sees it, municipalities should expect their attorneys to assist them in "making the legally correct decision" and by that he means making a decision that a court won't reverse. . Keep your attorney free of politics.
3) Who does the attorney work for? The board, the council, the taxpayers?
It's best to have them work directly through a neutral person like the city or town manager or the clerk or the planner, says Lovell. By doing so, the attorney does not get caught in the politics of an issue when the board or council is divided on an issue. It keeps elected officials from using the attorney as their political foot soldier. It's also cheaper, avoids duplication and produces consistent information. She warns it is irresponsible to hinge your decisions on politics. She warns against "shooting the messenger who says what you are doing is unconstitutional."
4) Keep your attorney up to speed at all times.
Ed Bearor says one way of practicing economical law and preventive law is to keep your attorney up to speed. Instead of getting a call the day before an issue is about to blow up, send your attorney clippings from the newspapers as the issue unfolds. Don't ask them to come up to speed at the last minute. It's costly and not efficient, says Bearor.