$250-an-hour cap sought on state work

Private attorneys who do work for state government could face more hurdles — and limits on pay — if proposed legislation becomes law.

House Judiciary Chairman Stanley Cox introduced HB255, the Private Attorney Retention Act. The bill sets standards state agencies must follow when hiring private lawyers if they expect fees and expenses to exceed $100,000.

For projects of that size, the bill would require open, competitive bidding, though exactly what that means and who is ultimately chosen is left largely undefined.

The measure also would allow a legislative committee to review proposed legal service contracts worth more than $1 million before agencies award them. An agency also would have to disclose to legislators any relationship it already has with the firm and the reason it selects a particular firm.

According to the Missouri Accountability Portal, an online database of state spending, Missouri government has spent more than $5.4 million on private attorneys in the current fiscal year, as of last week. The state spent nearly $8.7 million last fiscal year. It isn’t clear from the site how much of that work would have required open bidding if the proposal had been in place.

For contingency fee cases, the legislation would require law firms to submit a report to the state upon conclusion of their work spelling out the hours worked, expenses and a breakdown of the ultimate rate per hour. The legislation would prohibit the state from paying more than $250 per hour for such outside legal services.

Cox, R-Sedalia, said the legislation, modeled on a proposal by the American Legislative Exchange Council, was spurred in part by concern in Missouri and other states about fees paid to private lawyers as part of the national settlement with tobacco companies years ago.

The idea also arose during the 2008 campaign for governor, when Republican Kenny Hulshof attacked the practices of Jay Nixon, a Democrat, as attorney general.

Hulshof accused Nixon of awarding large contracts to law firms that supported him politically, and tobacco litigation was his prime example.

The Missouri lawyers worked on the case for about five months before a national settlement was reached and reaped a fee of more than $111 million. The attorneys’ fees were not paid by the state but rather by the companies in an amount agreed to by mediation.

‘Natural conflict’

Cox said open bidding would discourage state officials from directing work to friends even if they’re not the best qualified or most affordable option for taxpayers.

“That natural conflict exists. By creating a system that they have to involve other people, you minimize the risk of that,” he said.

The House Judiciary Committee heard Cox’s bill in early March. The Missouri Bar didn’t formally weigh in on the bill but shared some attorneys’ concerns with Cox. Attorneys, whose names weren’t included in the note, worried that such a requirement could result in improper meddling by legislators in executive branch decisions. St. Louis attorney Mark Pasewark said the language doesn’t address some important conflicts, such as if the House speaker works for the firm in question, and that the cap of $250 per hour was unreasonable and would make certain expertise off-limits to the state.

The state Chamber of Commerce and Associated Industries of Missouri, two business organizations, spoke in favor of the bill.

The American Legislative Exchange Council is a national group of state legislators that supports free markets and limited government. According to the group, eight states, including neighboring Kansas, have passed some form of a Private Attorney Retention Act, and about a dozen others are considering similar legislation.

Last year, Democratic State Auditor Susan Montee’s review of the Missouri Technology Corp. raised questions about a contract for that quasi-governmental agency’s general counsel hiring. Montee said the agency didn’t follow state purchasing rules when it hired Bryan Cave in 2007 without following the criteria in its own bid proposal. The agency paid the state’s largest law firm about $960,000 from October 2007 through December 2009. Missouri Technology Corp. again offered a contract to hire a general counsel firm in 2010, and again chose Bryan Cave.

Republican Tom Schweich defeated Montee in November. Schweich previously worked at Bryan Cave, as did the agency’s director, Jason Hall, who took the MTC job in spring 2009.