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Monday, October 25, 2010

Monday, October 25, 2010

Lawyers, Money, Hide & Seek

By Charles Schwartz, UC Berkeley October 25, 2010

Earlier this year, perusing the published list of reports regularly provided to the Regents by the University of California Office of the President (UCOP), I noticed this item, “Annual Report on Use of Outside Counsel,” and submitted a formal request for a copy of that document, under California’s Public Records Act (PRA).

I received an official response, dated June 8, which said,

The annual report on the use of outside counsel legal expenses was an attorney-client privileged communication from General Counsel Robinson to the Board of Regents and is thus exempt from California Public Records Act disclosure. (Government Code section 6254(k)).

On August 7, I wrote again to the UCOP-PRA office:
I have just seen the 2008-2009 Annual Report of the Office of the General Counsel; and there one finds published data on the very topic I had inquired about: overall outside counsel expense was $100,000,000.
This discovery leads me to ask that you reconsider my original request for that report, perhaps in some redacted form if there are particular details that would best (in the public interest) be kept confidential.

On August 19 I received an official acknowledgment of this renewed request and was given an estimate of six weeks for the production of the documents requested.

On September 29 I wrote again, saying that I had received nothing yet and asked for a progress report. I received a prompt response, which said that they would provide a status update on October 11.

On October 11 they wrote:

We are almost finished reviewing your documents. I will provide a status update for you, at latest, on Monday, October 18 as to where we are on the production of the requested documents.

And again on October 18:

We are still reviewing your documents. I will provide a status update for you on Monday, October 25 as to where we are on the production of the requested documents.

This prompted me to write, on October 18:

This habit of weekly delays is beginning to sound like a deliberate non-compliance with the requirements of California's Public Records Act and related University policy. It is now nearly five months since I submitted my original request for these records. And it is about half that time since you gave me a "six weeks" estimate of the time required to produce the documents. Please bring this complaint of mine to the highest responsible authority at UCOP; and then tell me the response you get.

On October 22, I received this email:

The documents that you have requested are available online at http://www.ucop.edu/ogc/, under "Items of Interest" - FY 2009 Annual Report of Legal Expenses for Outside Counsel (pdf). By providing you with this information, we consider your Public Records Act request 10-355 to be fulfilled and our file will be closed.

The document is now posted for anyone to see. It is 28 pages in length, labeled “fy-09-annual-report-redacted.pdf”; but I was unable to identify any place where material had actually been redacted (removed). So I have written to them again asking that they identify what, if any, materials have been redacted.

What has been learned?

About the OGC (Office of the General Counsel): The Regents run a big organization, the University of California, and they keep an in-house staff of around 75 attorneys, two-thirds of them working at the Oakland headquarters, at an annual cost of around $17 million, to handle a wide variety of legal issues that arise. In addition, the OGC spent $84 million in FY 2009 for outside legal counsel; and this is reported as a 15% decrease from the same cost paid out the previous year (about $100 million). Is that a lot? Is there anything wrong or embarrassing about the revelations in this report? I do not have the professional experience to allow me to make such a judgment; but, obviously, some important people in the UC hierarchy did believe that this information was best kept from public view. I invite everyone to look at this report and form their own opinion.

About using the California Public Records Act to obtain release of documents from UC officials: Persistence is a necessary (but not always sufficient) part of the technique. I should add that I do have some special experience here: several years ago I initiated a successful lawsuit against the Regents for their violations of the PRA in connection with investment activities. In that case, the Regents did hire expensive outside counsel, pursued the case all the way to the California Supreme Court, losing at every step, and probably spent about one million dollars for that whole exercise.

Qui custodiet custodiens? Who shall guard the guardians? That is an old Roman saying, more recently recited by Lisa Simpson asking, "If you're the police, who will police the police?" Here, at this great public institution, the University of California (as at other great universities across the country), we have a Board of Regents whose purpose is to be the custodians of this public trust, to protect the general public interest against any internal or external selfish interests that might seek to use the university for narrow gains.

So, we can ask, Who will oversee the overseers? Of course, they will say that they have many such professional overseers: lawyers and accountants and actuaries and consultants and advisors – but all of them are hired by the Regents themselves or by their topmost executives, who are necessarily responsive to the Regents.

I think we should all think about how to do this better.


Aldo Antonelli said...

One hundred million in outside legal fees when UC has attorneys by the roomfuls sitting in Oakland seems like a shitload of money to me.

And it's also about half the money supposedly saved by the infamous furlough program.

Anonymous said...

From the reporton the OGC website:

"In-house legal costs on average are at least 100 percent lower than the most competitive hourly rates charged for the same services by outside counsel." (p. 2)

So, let's see: we get a 100% discount for in-house legal services, so they are ... free?

Notice the "at least:" occasionally in-house counsel provides a discount greater than 100%, meaning they actually pay for the privilege of representing UC in court?

Don't we all wish OGC would know how to handle fourth-grade arithmetic?

cloudminder said...

Yes, One Hundred Million Dollars... you can read about it here

This reminds us of the August Audit and Advisory Special Meeting.
During the discussion of the cyber security insurance plan
the presenters mentioned- in trying to sell the value of the insurance- that there is a current on-going case where the liability could be in the hundreds of millions of dollars. We recall this info peaked the attention of Regent Makarechian and he referred to it as well in his questions. Do any of you readers happen to know what case they were referring to specifically? Do we have the right to know? We attempted to find out but, well, let's just say we felt "intimidated" and didn't pursue it.

Also, it appears there are many firms up and down the state on retainer for UC -- perhaps those pursuing legal representation (e.g. against UC) might have the option to: first ask any firm they consider hiring if that firm would have a conflict in representing them(e.g. against UC)? - perhaps ask that first before supplying any identifying information or details on any potential case might be a good idea?- do your research on this folks!

Geez, its crazy the UC community has to think this way!

This also reminds us of Bob Samuels Why UC Has Huge Legal Bills post

Charles Schwartz said...


UCOP has now told me that the only information "redacted" from this report (on expenditures for outside legal counsel) was the identity of several trusts and estates listed in the Appendix Table D.


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