In-house attorney's office hasn't capped costs

When the Augusta Commission finally decided in late 2000 to create an in-house legal department that the consolidation charter had called for five years earlier, those who voted for it believed it would save the city money.

 

For the most part, that hasn't happened.

The amount of money the city has spent on legal services has been on the rise since 2005. The yearly totals -- which include law department salaries and expenses and fees for outside counsel hired by all departments -- fluctuated for the first five years of the past decade before settling into a steady increase the last five.

During the rocky two-year tenure of former General Counsel Chiquita Johnson, legal services surpassed $2 million for the first time last year.

Under her management, the Law Department busted its $450,000 budget for outside legal work last year. The Augusta Commission had to move $600,000 out of contingency and reserves in August and is likely to move another $150,000 from the general fund on Tuesday to pay incoming December bills.

That brings the 2009 total to $1.2 million -- a 64 percent increase over the $730,000 spent in 2008.

Commissioner Don Grantham said he realizes Ms. Johnson didn't have enough in her budget to start with, but says she didn't have to go that far over.

"We were told that it would not exceed previous years, or be less, but it has been more," Mr. Grantham said.

"How has an in-house legal department saved money? That's the question that needs to be raised."

MS. JOHNSON WAS forced to resign this month after losing favor with a majority of commissioners because of several controversial decisions she made or changes she tried to institute.

A major problem for commissioners was her penchant for farming out nonspecialized legal jobs to firms and attorneys outside Augusta. Through a series of Open Records Act requests, The Augusta Chronicle reviewed the city's legal bills from May 2007 through November.

During that time, Atlanta law firms and attorneys charged nearly $400,000 to represent the city. Taxpayers had to pay not only for their legal work but also the time it took to drive to and from Augusta, their mileage for those trips and hotel stays.

At $250 to $300 an hour, the costs soared quickly.

Local attorneys' fees vary, but two firms that have long histories with the city -- Shepard Plunkett Hamilton & Boudreaux and Burnside Wall -- have agreements to limit their fee to $175 an hour to work for the city.

The added cost of higher fees and travel expenses incurred by hiring out-of-town attorneys is illustrated with two high profile cases.

The Augusta-based Wall law firm has charged the city $137,726 so far for working seven years to keep closed the Augusta Video X-Mart -- an adult video store. By contrast, Atlanta-based Freeman Mathis & Gary has charged $84,320 so far for defending the city for eight months in the discrimination lawsuit filed by former engineering department head Teresa Smith.

ATTORNEYS WITH both local firms still do work for the city, but under Ms. Johnson most new jobs went to out-of-towners.

Ms. Johnson also farmed out the job of representing the city in property tax appeals, which is not considered a particularly difficult area of law.

"The nuts and bolts of it isn't rocket science," said Augusta attorney James Trotter, who has represented residents in appeals, adding that these cases are a matter of appraisal and evaluations and following the right procedure.

In a five-month period, Thomas Means Gillis & Seay charged the city $66,460 to handle tax appeals.

Former Chief Appraiser Calvin Hicks, now with DeKalb County, said Friday that when Ms. Johnson was appointed general counsel, city departments began sending all legal matters to the Law Department. But later, Mr. Hicks said, a city staff attorney told him that an Atlanta law firm, not the city's Law Department, would handle his department's legal work.

That didn't make sense to Mr. Hicks, who said he believed -- and his board and some county commissioners agreed -- that it would be better for the tax appeal work to go back to the Augusta firm that handled it before Ms. Johnson took control of the Law Department. Ms. Johnson didn't like the idea, but the tax appeals cases went back to Steve Shepard's firm, Mr. Hicks said.

The appraiser's office wasn't the only city office to discover Atlanta attorneys unexpectedly.

In May, Freeman Mathis & Gary reviewed the city's charter for $6,050. City commissioners were unaware of Ms. Johnson's plans to have the charter amended to give her sweeping authority over every city department and employee.

ATLANTA FIRMS were given other jobs representing the city, such as employment cases. One was for Meschery Powell, who filed a small-claims case against the city after Ms. Johnson fired her in violation of the Family and Medical Leave Act. Instead of settling the case after the Labor Department ruled in Ms. Powell's favor, Ms. Johnson hired Thomas Means Gillis & Seay.

Between Ms. Powell's suit and the controversy over the forced resignation of former city General Counsel Eugene Jessup -- which involved his and commissioners' requests to review employees' computer hard drives -- taxpayers paid more than $83,703 to the Thomas Means firm.

Ms. Johnson attributed the increased legal costs to more work that came to her department, and she wanted to increase the number of staff attorneys.

A study by her department in February 2009 found the city's legal department was understaffed with four attorneys and underfunded compared with other local governments in the Southeast, such as Savannah, Ga., and Columbus, Ga.

The study proposed hiring four new employees for the department -- one senior attorney, one junior attorney, one paralegal and one investigator -- to reduce the amount of legal work being farmed out.

The study by attorney David Ranieri cost $5,184.

NOW SOME COMMISSIONERS are coming up with their own plans.

Joe Bowles said the city should have only two attorneys on staff -- a general counsel who acts as the commission's primary adviser and decides which work to farm to outside firms, and a staff attorney to handle real estate transactions for the land bank.

Mayor Deke Copenhaver suggested the next general counsel answer to the city administrator rather than the commission, establishing a clear-cut chain of command. Based on interviews with several commissioners, Ms. Johnson was apparently receiving approval to hire specific firms in closed legal meetings, but officials weren't kept abreast of how much the bills were.

Mr. Grantham said the Law Department needs a better reporting system, along with a directive that when hiring outside counsel, local firms must be sought out first.

FORMER COMMISSIONER Betty Beard, one of the chief proponents of having an in-house Law Department, said she would have voted to fire Ms. Johnson, had it come up. She said she didn't appreciate the attorney hiring so many out-of-town firms for work that could have been done in house, particularly the firm that represented Ms. Johnson in the Powell case.

Ms. Beard said she thought having an in-house general counsel would be more economical than using private attorneys, but that wasn't the case with Ms. Johnson.

"I really thought we'd gotten a terrific person," she said. "I am very sorry that this has happened. I hope it will be the last time.

"I just think we selected the wrong person for the job."

Reach Sandy Hodson and Johnny Edwards at (706) 724-0851.

AUGUSTA LAW DEPARTMENT TIMELINE

MARCH 27, 1995: The Augusta-Richmond County consolidated government is born with the passage of a consolidation law. The law includes a provision for the creation of a city Law Department.

JAN. 5, 1996: City Comptroller Butch McKie estimates a six-person law department would cost about $500,000 a year. The debate over how to structure a city law department begins. Former County Attorney Jim Wall represents the new government in the meantime.

MARCH 5, 1997: Then-state Rep. Robin Williams tries unsuccessfully to win passage of a bill that would allow the consolidated government to continue to contract legal services with a private attorney instead of creating a law department.

DEC. 11, 1998: Subcommittee recommends continuing to contract with Mr. Wall's law firm while planning for a law department by January 2001.

MAY 25, 2000: Commission committee approves a plan to create a "hybrid" legal department that would employ a private attorney to lead it. The estimated cost is $554,665.

OCT. 17, 2000: Commissioners vote 6-4 to create an in-house legal department. Mr. Wall announces he will stop representing the city at the end of the year.

NOV. 21, 2000: Commission extends Mr. Wall's contract for two years to allow for a transition to an in-house law department.

Feb. 14, 2002: Commission scraps its search for in-house city attorney because of a lack of qualified candidates. Two staff attorneys are hired to help Mr. Wall represent the city, although commissioners bicker over who should hire the attorneys, Mr. Wall or city commissioners.

OCT. 8, 2003: Commissioner Steve Shepard expresses interest in taking over Mr. Wall's legal position after Mr. Wall announced he would not seek to have his contract extended another year.

JAN. 21, 2005: Mr. Shepard, the contracted city attorney, faces commissioners' anger over the amount of money he charged for legal services for the issuance of bonds.

NOV. 24, 2006: A personnel screening committee recommends W. Eugene Jessup -- a Macon attorney who was censured by the supreme courts in Georgia and Louisiana in 2005 for charging a client an excessive fee -- as general counsel of the in-house law department. Committee also recommends Andrew G. McKenzie of Columbus as a staff lawyer.

MAY 7, 2007: Mr. Jessup is asked to resign after angering commissioners. Mr. Jessup confiscated the computer hard drive of staff attorney Vanessa Flournoy and learned she had been operating a real-estate closing business since 2003 on the government's equipment. Ms. Flournoy was forced to resign.

Oct. 16, 2007: Commissioners vote to hire Chiquita T. Johnson as a staff attorney, and vote to hire J. Pope Langstaff, the Macon city attorney, as the city's new general counsel.

NOV. 7, 2007: After Mr. Langstaff turns down the job in Augusta, city commissioners appoint Ms. Johnson as the interim general counsel.

FEB. 20, 2008: Commissioners give Ms. Johnson the job as general counsel.

MARCH 2, 2008: Ms. Johnson explains to a federal court judge why the city missed a deadline and faced a default judgment in a civil lawsuit filed against the city over allegations of unfair practices by the city's purchasing department.

JAN. 7, 2009: Staff attorney Stephanie Jones agrees to resign.

SEPT. 18, 2009: Meschery Powell, a former assistant in the city's Law Department, wins a $3,000 judgment against the city because Ms. Johnson fired her in violation of the Family and Medical Leave Act.

AUG. 4, 2009: The Augusta Commission votes to take $600,000 out of reserve and contingency funds so the law department can continue paying outside attorneys through the end of the year. The department has already exhausted its $450,000 outside legal budget.

DEC. 15, 2009: Commissioners refuse to grant Ms. Johnson's attempt to change the city charter that would give her new powers such as a peace officer able to investigate any city office, employee and any business doing business with the city. They also reject her attempt to remove the media from commission chambers and prevent reporters from interviewing commissioners on the eighth floor.

DEC. 30, 2009: Commissioners express concerns about the nearly $5,000 Ms. Johnson has charged on a Sam's Club card for items that include office decor and snacks, as reported in The Augusta Chronicle.

JAN. 5, 2010: Commissioners vote to accept Ms. Johnson's resignation in a deal that provides her with nine months of salary and benefits, valued at about $93,750. They appoint Mr. McKenzie as interim general counsel.

Source: The Augusta Chronicle archives

AUGUSTA CALLS ON ATLANTA LAW FIRMS

Legal work farmed out to Atlanta attorneys and law firms from May 2007 to November 2009 during Chiquita Johnson's tenure as city attorney.

Attorney/firm   Total paid   Additional expenses paid

Thomas Means $96,626.72     $1,153.27

Mary Cooney     $21,628.75       $0

Freeman Mathis $263,765.15     $1,272.50

David Ranieri      $5,183.75       $0

Bray & Carroll    $1,350.00       $0

Total: $390,980.14

Source: Attorney bills submitted to the city for payment.

AUGUSTA'S ANNUAL LEGAL EXPENSES

The following figures, obtained from the Finance Department through an open records request, show the city's total expenses for legal services going back to 1999. The Augusta Commission voted to form the in-house legal department in late 2000. The figures include the cost of the department itself and money paid to outside law firms, including those hired by the Law Department and those hired by other agencies, such as the sheriff's office.

Year Total Expenses

1999 * $1,832,989

2000   $792,292

2001   $1,237,511

2002   $912,479

2003   $1,541,198

2004   $1,274,393

2005   $1,439,202

2006   $1,623,236

2007   $1,928,102

2008   $1,956,470

2009 ** $2,149,345

*The comparatively high legal bills in 1999 were caused by major lawsuits filed by dairy farmers who contended the city's waste water sludge fertilizer poisoned their land. Lead attorney Jim Ellison said lawsuits filed against an insurance company eight to nine years later enabled the city to recover most of the legal fees.

**All legal bills are not yet in for 2009.

Source: Finance Department

ONLINE EXTRA

Read the Augusta-Richmond County, Georgia Legal Services Study (PDF format)