States Revise Policies on Outside Counsel

In a number of mass torts -- including tobacco, handguns, lead paint, and Oxycontin -- states and municipalities have brought lawsuits for money damages, seeking compensation for funds spent responding to harms caused by the various products.  While some of these government entities have handled their own legal work, and other have received pro bono assistance from law firms, many of them have turned to outside counsel.  Indeed, many of the nation's most prominent mass tort plaintiffs' lawyers have represented states and municipalities in recent years.

An article in this week's National Law Journal -- AGs Review Hiring of Outside Counsel -- looks at states that are reviewing or revising their policies on such hiring:

Attorneys general in seven states -- some of whom have retained plaintiffs law firms to bring high-profile lawsuits involving lead paint and the painkiller OxyContin -- are instituting new policies or facing legislative pressure to make the hiring of outside legal counsel more transparent.

The changes come as several tort reform groups, particularly the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce, have been appealing to attorneys general for more transparency and accountability in how they retain outside law firms.

Plaintiffs lawyers said the moves toward transparency are assaults by business groups on attorneys general who bring damaging cases against them.

In recent months, attorneys general in Ohio, New Jersey and California have instituted new policies that would require law firms to bid publicly for work or would reduce confidentiality in the hiring process.

Legislators in Mississippi and West Virginia recently introduced bills, backed by tort reform groups, that would create oversight committees to review contracts between the state's attorney general and law firms.

Other efforts in Kansas and Nevada are aimed at reducing the use of outside counsel.

The use of outside counsel by government plaintiffs has been controversial.  Some of the controversy pits the usual combatants making the usual arguments about tort liability.  Unsurprisingly, the Chamber of Commerce disfavors the use of contingent-fee outside counsel for state tort claims, while trial lawyer groups favor it.  But there are interesting aspects to the issue that are unique to government litigants.  In addition to pay-to-play concerns about links between public contracts and campaign contributions, the use of contingent-fee lawyers for government plaintiffs also raises separation of powers concerns because it allows attorneys general to sidestep the legislative branch's control of the purse strings.

HME