Hold til 3/8: AGs consider controversial best practices document

Chris Rizo Mar. 8, 2010, 4:10pm


WASHINGTON (Legal Newsline)-The nation's state attorneys general are considering recommendations for hiring outside lawyers on contingency -- a controversial practice that legal reformers have long decried.

Discussions over a draft document outlining "practical considerations" for hiring outside counsel began en masse at this week's meeting of the National Association of Attorneys General. The talks are taking place against a complex backdrop of politics and policy.

Today, the attorneys general were given a draft of the proposed document, which proponents say will help ensure transparency in the hiring of outside lawyers to pursue legal actions on behalf of their offices.

Rhode Island Attorney General Patrick Lynch, a Democrat, is the chairman of the NAAG Best Practices Task Force.

"The objective is to create a resource particularly for new AGs," he said.

Washington Attorney General Rob McKenna, a Republican, said the document is "still a work in progress," and AGs will likely consider a final version at their summer meeting.

"There is just editing going on at this point," McKenna said. "This is the first look that many AGs have seen it. We'll take it up in June."

Colorado Attorney General John Suthers, a Republican, said he hopes the group is able to adopt suggested guidelines.

"Hiring outside counsel is one of the most important decisions that AGs make, and we ought to make sure that new AGs know all the considerations ' the pros and cons."

States typically hire outside counsel on a contingency-fee basis to pursue large consumer protection or securities cases when their office lacks the financial resources to bring suit.

Critics of the process say the arrangement encourages cronyism and pay-to-play politics since AGs can tap their high-dollar trial lawyer campaign contributors to represent the state as a reward for their political support since most contingency-fee contracts are not competitively bid.

"Abusive use of outside counsel by some state attorneys general is well-documented, as political supporters reap windfall rewards from no-bid state contracts with little or no public accountability or the checks-and-balances state governments should provide," Tiger Joyce, president of the American Tort Reform Association, said in a statement.

Last month, ATRA issued a report on state laws governing the use of outside counsel. Half of states were given a "D" grade, while three received an "A" and nine received a failing mark. Texas, Kansas, Minnesota received the highest marks.

States receiving an "F" were Idaho, Iowa, Michigan, Mississippi, Nebraska, Rhode Island, Tennessee, Vermont and West Virginia.

Often criticized for his use of outside contingency counsel is West Virginia Attorney General Darrell McGraw, a Democrat who used contract counsel to sue Purdue Pharma over the company's deceptive marketing of its painkiller OxyContin. In 2004, the case settled for $10 million, a third of which went to the private attorneys who litigated the case and were his political supporters.

One NAAG insider, who spoke on the condition of anonymity, said negotiations over the document will likely become heated, especially given that there are 30 attorney general races this year, but said ultimately AGs will adopt recommendations for hiring outside lawyers.

"This could get very ugly," the person said. "It could bring out the worst between the Republicans and Democrats."

Former Ohio Attorney General Betty Montgomery, a Republican, said she too believes the draft document faces "a rough ride" in the next few months.

"I think that we should have criteria and that we should be extraordinarily careful about lending our badge to outside counsel," said Montgomery, who was Ohio's chief legal officer from 1995 to 2003.

"When we hire outside counsel it should be done with great care and lots of consideration and justification," she said. "Otherwise, it looks like your office or your badge is for sale."

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