Bill would add transparency to attorney contracts

published in The Journal Record | April 23, 2010

McAfee & Taft commercial litigation and construction law attorney Henry Hoss was recently featured in a Journal Record article about a proposed bill to require greater transparency when state agencies hire private attorneys.

Hoss said that at first glance the bill sounds like a good idea, but could cause problems for some law firms.  The bill, which is working its way through the Oklahoma Legislature, would probably bring more transparency to state purchasing, but could also cause problems for agencies that need outside legal counsel quickly.

Senate Bill 1379 would create the Private Attorney Retention Sunshine Act and would require state agencies that hire private attorneys to use a competitive public process anytime the contracts are greater than $5,000.

Under the bill, agencies would have to put the work through a request for proposal (RFP) process and post the proposal in a conspicuous location on their website. According to the bill’s authors the measure would provide more information for taxpayers. Information about the lawyers or law firm awarded the contract – including services to be performed and projected total payments – also would be publicly available.

Hoss said the bill could be viewed both positively and negatively.

“I think the idea of transparency is always a good idea for the taxpayers and the citizens,” he said. “What concerns me is within the state you have lots of attorneys who are employed by the state and when they face complex issues and need to turn to outside council, they would have to wait for their RFP.”

Under the bill, the governor would also have 30 days to review all agency contracts with private attorneys that exceed $500,000 and recommend changes. If the agency chooses not to include all the governor’s recommendations, it must state why it chose not to adopt them.

The Journal Record article went on to share that the legislation requires private attorneys to provide a statement of the hours worked on the case, expenses incurred, the aggregate fee amount, and a breakdown of the hourly rate based on hours worked divided into the fee recovered, less expenses. Attorneys could not charge the state more than $1,000 per hour.

Hoss said the amount of time involved in securing an RFP and the low threshold of $5,000 could cause problems for some firms.

“It concerns me that the $5,000 figure is a little bit low,” he said. “If you have to wait for an RFP and then wait a certain amount of time, it may be too late, particularly because it’s not indexed for inflation.”

State Rep. Mark McCullough, R-Sapulpa countered, saying state agencies need more scrutiny when they hire outside attorneys.

“The fact that outside attorneys are hired so often in Oklahoma and the public is not allowed to closely scrutinize those contracts should raise a red flag for citizens,” he said.

He said Oklahoma received unwanted national attention last year when The Wall Street Journal published an editorial noting the lack of transparency in the state’s hiring of private attorneys. Over the past three years, the pair noted, state agencies have spent more than $24 million on private attorneys over a three-year period.

While he praised efforts to increase transparency, Hoss said state agencies could have issues with confidentiality and how new contracts were written.

“There could be concerns about confidentiality,” he said. “But it’s not a surprise that the state would want that transparency.”