Wednesday, November 13, 2002
Board of Supervisors Orders County Counsel’s Office To Hire ‘Litigation Manager’ to Control Legal Costs
By ROBERT GREENE, Staff Writer
County supervisors yesterday imposed a cultural shift on their huge legal department, ordering the County Counsel’s Office to hire a manager from the private sector to rein in spiraling litigation costs.
The board’s unanimous action targets both internal county counsel costs and the escalating fees that the county pays to the 153 law firms it has under contract.
The supervisors instructed County Counsel Lloyd “Bill” Pellman to return in two weeks with a new organizational chart showing the central role of the new “litigation cost manager,” a top-level official who is to track cases and recommend cost controls.
Supervisor Gloria Molina spurred the review over the summer when she became outraged at what she deemed pointless trial preparation costs for settled cases. Yesterday, Molina said a private sector perspective was crucial to managing costs.
“That should give us a whole new spin,” Molina said after the vote. “Right now, [the County Counsel’s Office] seems to be in a rut. We do it the same way all the time.”
Molina has long complained that the county counsel provides her and her board colleagues with sparse data on litigation costs. But her frustration turned to anger in June, when Pellman asked for authorization to settle a retaliation suit brought by former Department of Children and Family Services worker Rebecca Lizarraga.
It was not the $450,000 settlement that upset Molina, but the approximately $170,000 in legal fees an outside firm racked up for a case that the supervisor charged was an open-and-shut loser for the county from the beginning.
Molina said the county counsel should have identified the suit as a no-win case and settled before permitting fees to mount.
As Molina pressed her case over the summer months for a “managing partner” to keep an eye on outside firms, the county was faced with more headline-grabbing cases.
In August a Los Angeles Superior Court judge in Compton ordered the county to pay $12.3 million in a medical malpractice case when the county’s private outside lawyer failed to show up for trial. The county is appealing that ruling.
In another dispute, over a $1 million Hollywood Bowl contract that ultimately settled for $4 million, the county’s legal fees reached $6 million.
The county spent $167 million on lawyer fees, litigation costs, judgments and settlements last year. Molina and Supervisor Yvonne Brathwaite Burke, who co-authored the motion, noted that a 3 percent reduction could save more than $5 million.
“All of us have been incredibly frustrated,” Molina said, but she acknowledged that rising litigation costs plague private corporations as well as the county.
Pellman has been widely praised for shaking up the culture of his office in his four years at the helm. But a new top manager with a private sector background, whose sole job is to scrutinize the office’s practices and costs, is expected to make an unprecedented change.
Pellman said yesterday that he supported adding a cost manager and has been seeking a similar position since an outside audit of his office in 1998.
“It’s important to maximize the amount of money the county departments can spend more on service delivery and fewer dollars defending ourselves in a case,” Pellman said.
Pellman’s “client” is the people of Los Angeles County, but as a practical matter his office represents about 40 county departments. Much, although not all, of the litigation is referred out, and the county counsel acts more as an in-house corporate counsel managing the outside litigators.
But Molina and Burke argued that too little is still being done to track each outside firm’s billing.
Molina backed away from the “managing partner” designation for the new official when lawyers noted that managing partners usually do their best to get their firms’ billings as high as possible. The supervisors were looking for someone to keep billings low.
A nationwide search will be conducted for the litigation cost manager. The motion specifies that the person must have “extensive private sector experience”-—but it does not specify whether he or she must be an attorney.
The county already has a risk manager, who will work with the new cost manager to analyze cases from each department and “identify trends and problem areas.”
The new cost manager is to provide the board an estimate of how much can be saved each year through tighter controls.
The manager will report directly to Pellman. But he or she will also sit with the board in closed session and notify the board of matters like the Lizarraga case and recommend whether to settle—months earlier, county officials said, before many thousands of dollars have been spent on outside counsel.
Copyright 2002, Metropolitan News Company