Back in the 1990s, our state legislature revised the rules regarding government agencies hiring outside lawyers. That was after the conviction of former Texas Attorney General Dan Morales for illegally attempting to divert $500 million in tobacco-litigation contingency fees to a friend.
The new rules require contingency fee contracts to be submitted to the Comptroller for “review and approval” and specify a maximum contingency fee of 35 percent, strict requirements for keeping billing records, and a prescribed method for calculating fees.
In a 2012 decision involving litigation by counties relating to the mortgage crisis, a federal court affirmed that requirements under Texas law “must be satisfied before a Texas county can retain outside counsel on a contingency fee basis.”
In light of the recent flurry of opioid lawsuits and the exceptionally bad deal negotiated with attorneys by Harris County officials, it may be time to revise the rules again.
In Harris County, officials agreed to pay a contingency fee of 35 percent to three law firms for representation in an opioid suit, more than double what Dallas County’s elected representatives agreed to in their similar opioid suit.
Legislation introduced in the House and Senate (HB2826 and SB 28) would require local governments to negotiate “reasonable” hourly rates when contracting for legal services on a contingent basis, rather than offering percentage-based awards as often done now.
“Texas taxpayers have the right to know the details when a private law firm is handling the government’s work, and they have the right to expect the government will keep the lion’s share of any money recovered in the lawsuit,” declares Lee Parsley of Texans for Lawsuit Reform.
The bill would also require that contracts be negotiated with the “most highly qualified” attorneys – not just whatever firms first solicit – and that local governments publicly announce their plans to hire private attorneys.
“This bill brings transparency to the contracting process, keeping law firms accountable to Texas taxpayers and their government clients,” Parsley asserts. “It also ensures the best lawyers will be hired at reasonable fees and makes the standards for contingent-fee contracts by local governments consistent with those followed by the state of Texas.”
Some of our elected representatives don’t like sunshine and reasonable rules. That’s why they’re needed.
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