Use of Outside Legal Counsel in the Great City Schools: Survey Results

Compiled by the Council of the Great City Schools

August 2004

Draft

Use of Outside Legal Counsel in the Great City Schools: Survey Results By Beth Antunez
The Council of the Great City Schools conducted a brief survey of its members in July on their use of outside legal counsels. Thirty-one (31) districts responded.1 The results are summarized in the graphs below. Only three cities indicated that they solely used in-house counsel; 12 solely used outside counsel; and 16 used a combination.
Question 1: How is your district's legal representation organized?
20 15 10 5 0 In house counsel In house counsel supplemented by outside counsel Solely outside counsel 3 16 12

Question 2a: Is your school district fiscally dependent?

25 20 15 10 5 0 Yes No 9 22

Of the nine districts that are fiscally dependent, three indicated that the city or county provided the schools with legal counsel; five indicated that the city or county did not provide the district with counsel; and one district did not respond to this question.
1

Responses were provided by superintendents, school board members, and general counsel staff.

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Draft Fifteen districts, moreover, indicated that they spent up to $499,000 annually on outside legal counsel; 8 districts spent between a half million and one million dollars; and eight districts spent one million or more dollars on outside legal counsel.

Question 3: How much does the district expend annually on outside counsel?
number of responding districts spending within ranges 20 15 15 10 5 0 $0 to $499,000 $500,000 to 999,000 range $1,000,000 or more 8 8

Question 4a: Does the school board approve the engagement of all outside legal counsel?
20 15 10 5 0 Yes No 13 17

Thirteen of the responding cities indicated that the school board approved engagements with all outside counsels. Seventeen districts, on the other hand, indicated that the board did not approve such engagements. The survey did not ask about a dollar threshold before legal engagements went to the board for approval.

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Draft Districts, which indicated that they did not explicitly seek board approval before engaging outside legal counsel, were asked how such engagements were determined. Fifteen (15) districts explained. Their verbatim responses are shown in the table below. How is engagement determined when the board does not approve?
Anchorage Austin Superintendent's decision The school board approves a list of approved law firms. If the district must go outside the list, the superintendent and general counsel are authorized to enter into professional service agreements as long as the engagement does not exceed $50,000. City Corporation Counsel engages outside counsel The general counsel approves outside counsel; however, the school board approves all payments to outside counsel. Board approves rate of compensation for outside counsel, and chief counsel employs outside counsel when necessary. Outside legal representation is determined by the superintendent. Executive Directors can engage counsel Determined by general counsel Superintendent can select legal counsel for personnel matters or other matters when necessary. The district counsel recommends outside counsel with the approval of the board and the superintendent. The district superintendent, who is hired by the state, unilaterally approves the engagement of all outside legal counsel upon the recommendation of inhouse counsel. Outside counsel is approved by the city attorney. For those matters relative to insurance, the insurance provider assigns defense counsel on behalf of the division. Board approves and appoints legal counsel, staff engages counsel as needed As needed by Human Resources

Boston Chicago Clark County Denver Des Moines Detroit Guilford County Jackson Newark

Norfolk Richmond Salt Lake City Toledo

Question 5: Are maximum expenditures and hourly rates specifically enumerated in documents approved by the school board?
20 15 10 5 0 19 11

Yes

No

Districts were also asked whether they placed a ceiling on expenditures for outside counsel. Eleven cities indicated that they capped expenditures; 19 districts said they did not. Districts (both with and without caps) offered the following details:

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Draft Details on Expenditure Caps

Albuquerque Anchorage Austin Bid process establishes rate. The district has a negotiated rate with its lawyers: partners $150 per hour, others at a lesser hourly rate. Board policy determines authorization levels. Each approved law firm is required to submit a proposal. Once the board approves a firm, the general counsel enters into an engagement agreement with the firm that sets forth the terms of engagement. Outside counsel contracts approved by the Corporation Counsel provide for a maximum hourly rate and a maximum expenditure. When the Board approves the list of cadre attorneys, the hourly rate is included. There are no maximum expenditures. Historically, the Board has selected counsel, and the superintendent has approved the hourly rates charged. The Board approves a budget that includes an appropriation for legal fees and costs. If that amount is exceeded, there have been budget reallocations in the past. Maximum expenditures, but not hourly rates, are enumerated in documents approved by the school board. Hourly rate is approved by the school board, but expenditures are approved by the general counsel. Only maximum expenditures are approved by the school board There are hourly rates, not maximum expenditures. Rates are negotiated. School Board approves yearly budget Hourly rates are noted in any contract. Board approves the firm to be used for legal counsel purposes, general rates per hour and monthly payments. Detailed billing is reviewed by the Superintendent, Board and Board Administrator. The letters of engagement or contract specify the hourly rate. On occasion, a maximum amount is given. Via contract Hourly rates are included in the contracts, maximum expenditures are not. The district has been able to retain some of the top firms in the state at low rates. It would be impossible to retain the quality level of our firms if maximum expenditures were part of our contracts. This approach has allowed us to keep the same top firms for many years, building key relationships and keeping costs relatively stable. The Board has set rates that are 80% of a firm's standard hourly rates to other firm clients. There is no maximum for total legal fees set by the Board or school administration. The School Reform Commission (equivalent to the school board) by way of resolution establishes a cap per matter. Hourly rates are negotiated after retention and not included in any documents approved by the School Reform Commission. Rates are negotiated with general counsel; maximum expenditures are difficult to predict. Board does approve annual budget for outside legal fees, but this is a prediction. This is done through an RFP process.

Boston Broward County Charleston

Chicago Clark County Columbus Des Moines Detroit Duval County Guilford County Indianapolis

Jackson Jefferson County Newark

Omaha

Philadelphia

Portland

Salt Lake City

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Draft The districts were also asked to indicate who had authority to exceed budget limits for outside counsel. Their answers are presented in the table below. Who has authority to exceed budget limits for outside counsel?
Albuquerque Anchorage Austin Boston Broward County Charleston Chicago Clark County Columbus Denver Des Moines Detroit Guilford County Indianapolis Jackson Jefferson County Nashville Newark Norfolk Oklahoma City Omaha Palm Beach Philadelphia Pittsburgh Portland Richmond Salt Lake City San Francisco Toledo School Board Superintendent with Board approval (budget transfers from funds balance). The Superintendent and general counsel unless the $50,000 threshold is likely to be crossed. Addendum to contract must be negotiated with Corporation Counsel and approved by the mayor. There is no maximum expenditure; however, the hourly rate cannot exceed the School Board approved amount. If legal costs have exceeded budget limits, the board considers budget reallocations. No one has authority to exceed budget limits General Counsel requests additional funds from the CFO, who reallocates funds within the budget. CFO has duty to keep budget within overall limits. Board of Education Board of Education CFO, Superintendent, Deputy Superintendent General counsel in consultation with Senior Deputy CFO Board, Superintendent, CFO--but have to locate the funds elsewhere. General budget is established at the beginning of the budget year, payments are approved monthly by the board District counsel and the superintendent School Board There is no budgetary limit and the service is provided as needed. The superintendent. Only the city attorney. No one has authority to exceed budget limits The Assistant Superintendent for General Administration is in charge of internal legal services budgeting issues for individual district departments. School Board Joint decision involving CEO, CFO, Budget Director, and School Reform Commission upon recommendation of general counsel. School Board General Counsel as approved by the Board. The School Board approves contractual terms. Superintendent and Business Administrator Chief Budget Officer and/or Superintendent Executive Assistant to the Superintendent for Human Resources

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Draft In addition, districts were asked to indicate who oversaw and approved the work product of outside counsel. Eleven districts indicated that their in-house general counsel oversees and approves the work of outside counsel. Responses from the 20 districts that said someone else besides in-house counsel are presented in the table below. Who (other than in-house general counsel) oversees and approves the work product of your outside counsel?
Albuquerque Anchorage Boston Broward County Charleston Chief Business Officer and Risk Management Superintendent and/or direct upper management reports to superintendent. Corporation Counsel and Legal Advisor to the school department Checks and balances are achieved through a two-prong process. The work product is transmitted to the administrator at the specific department for review and is also sent to general counsel. The Board, the Superintendent, and the insurance claims handler all have access to the work product of outside counsel. However, the actual work product does not go to anyone for review prior to filing. Superintendent and/or designee Deputy Superintendent All in house attorneys District Office of Policy and Compliance Cabinet level staff as appropriate. Board, Superintendent, and Senior Staff The requesting party has some approval authority. But the legal department is under the authority of the mayor, who appoints the chief legal officer. City Attorney Superintendent of Schools, Director of Office of the Board of Education, Assistant Superintendent for General Administration. General Counsel (with CFO on bond transactions). Solicitor General Counsel and Human Resources School Board and Superintendent Superintendent's Cabinet Executive Assistant to the Superintendent for Human Resources

Denver Des Moines Detroit Duval County Guilford County Indianapolis Nashville Norfolk Omaha Philadelphia Pittsburgh Portland Richmond Salt Lake City Toledo

The Great City Schools were asked furthermore to indicate who outside counsel reported to in the school district. Thirteen districts indicated that outside counsel reported to the districts general counsel; two indicated that outside counsel reported to the superintendent; and three indicated that they reported to the school board. Nine districts, moreover, indicated that outside counsel reported to a combination of individuals. And four districts specified that outside counsel reported to someone else.

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Question 8: To whom does outside counsel report?

14 12 10 8 6 4 2 0
General Counsel Superintendent School Board Combination Other

13 9

Question 9: Within the school system, who can request advice, legal opinions, technical assistance, document drafting and review, etc. from outside counsel?
30 25 20 15 10 5 0 25 16 16 13 5 3

10

Superintendent

All Board Members

Cabinet level staff

Board Chair

Board Administrator

Committee Chair

Other

Finally, districts were asked to indicate who in the district could request legal advice, opinions, technical assistance, document drafting or review services. Twenty-five (25) districts indicated that the superintendent could request such services; 16 districts indicated that all school board members could make such a request; 16 districts indicated that a cabinet level staff person could make a request; five said that a board administrator could make such a request; and three indicated that a board committee chair could make a request. Ten districts said that others could make a request for legal services. The table below presents the written explanations that respondents gave to this question.

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Draft Details on who can request legal services

Albuquerque Anchorage Board has open access. Employees below assistant superintendent must receive approval from their assistant superintendent prior to contact. Senior staff members have authority to request and approve lower level staff requests based on need. Some requests need Superintendent, Assistant Superintendent, or CFO approval. As a matter of standard operating procedure, all requests for services by outside counsel go through the General Counsel. By law and/or district practice, the Board President, Superintendent, Chief Academic Officer, and Chief Financial Officer may access legal services directly if they wish. The district uses outside counsel for two purposes: major litigation that the legal advisor's office staff cannot staff adequately, and for most routine labor relations matters. For the former, counsel reports to the Corporation Counsel and responds to the Superintendent and School Committee. For the latter, outside counsel reports to the Chief Operating Officer and his labor relations staff. All requests are handled by the General Counsel. If necessary, the General Counsel contacts outside counsel. Staff members must obtain permission from the Superintendent or her Chief of Staff or another senior member of the administration prior to requesting assistance from outside counsel. The General Counsel is statutorily charged with responsibility for all legal matters of the school district, therefore only the general counsel may engage outside counsel. The General Counsel, or his designee, handles requests and decides whether it is impractical for in house counsel to respond. If so, it is referred to outside counsel. The district encourages all calls to go through general counsel's office first and then she will refer the question to outside counsel as necessary. Superintendent and cabinet can request advice; all other staff members must go through them. Any board member can call legal counsel. Most legal requests funnel through the Office of Policy and Compliance. Several Directors who deal with matters routinely needing legal interpretations can contact attorney directly. With approval of the superintendent The General Counsel has the responsibility to supervise and coordinate outside counsel requests for assistance. All requests are made through in house general counsel All requests for legal services go to the City Attorney. Only in the most unusual cases would outside counsel be brought in. Board Members may occasionally contact legal counsel. Specified staff members below the Assistant Superintendent level are authorized to contact legal counsel on a regular or ad hoc basis. Policy states that everything must go through the general counsel's office first. In practice, the CEO and School Reform Commission often go directly to outside counsel. All requests are approved by General Counsel. Board chair can also request independent advice. Principals can request advice.

Austin

Boston

Broward County Charleston

Chicago

Clark County

Denver Des Moines Duval County Guilford County Indianapolis Jefferson County Newark Norfolk Omaha

Philadelphia

Portland Richmond

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San Francisco Toledo All of the above can ask for legal advice, including school site administrators and principals. Human Resource Directors

Three districts provided additional detail on their legal services. There are presented below. Additional details
Albuquerque Through the bid process, the district has contracted with three law firms. One is the designated lead, one is back-up, and one is specifically designated for human resources/personnel issues. We work with major attorneys from the law firm. Major areas of education law determine which attorney we use: NCLB, special education, OCR, immigration, construction, tort, and personnel law. The district is currently interviewing for in-house counsel who will be supplemented by outside counsel for litigation and other matters.

Anchorage

Charleston

Summary The Council of the Great City Schools sent a survey to its superintendents and school board representatives asking for information on their legal counsels. Thirty-one (31) districts responded. Few districts rely solely on their in-house counsels. Most districts rely instead on a combination of in-house counsel and outside legal representation. Responses suggest that the districts use of outside legal counsel is often determined by its statutory relationship with City Hall. Sixteen of the responding districts indicated that they spent over half a million dollars a year on their outside counsels. Many districts have their school boards approve such engagements, but most do not. Many districts, moreover, place some kind of cap on outside legal expenditures, but most do not have a cap on both total expenditures and hourly rates. Expenditures over and above these caps can be approved by a variety of people, including the school board, the superintendent, or general counsel. Outside counsels routinely report to a district general counsel, superintendent, school board, or some combination. And a variety of people in the district above and below the superintendent are often authorized to seek legal services.

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