Energized by a reduced deficit and determined to make further
cuts, the city council will soon consider the idea of severing its
contracted counsel for an in-house city attorney.
Energized by a reduced deficit and determined to make further cuts, the city council will soon consider the idea of severing its contracted counsel for an in-house city attorney.
At first glance, it seems the move would save Gilroy money – hundreds of thousands of dollars in some scenarios. But it would also add additional personnel and training costs to the city, and strip its officials of access to more than 50 specialized attorneys who practice at San Jose-based Berliner-Cohen, the city’s contracted legal firm since 1991.
Over the years, the law firm has charged Gilroy varying amounts depending on workloads – from about $700,000 in busy 2006 to about $440,000 this past fiscal year. Last year’s bill is about par with other comparably sized cities that hire outside firms as well as those that pay a small in-house legal team, according to figures provided by other cities.
Proponents of in-house services contend a lawyer with an office in City Hall would ensure near-instant communication among council members, city employees and Gilroy’s legal team. They also say budget officials would also have a stronger handle on hourly rates and expected workload. Berliner-Cohen’s rates range from $105 to more than $450 an hour, compared to about $90 an hour for in-house attorneys, according to a survey of Bay Area cities.
Opponents claim the city will inevitably need to hire outside counsel for niche topics such as land use and real estate matters, which Berliner-Cohen has provided in the past through dozens of its own lawyers.
“The advantages of in-house attorneys are having them available on call and the lack of monitoring they require, but the downside is one person is not able to have the same breadth of experience as an entire firm,” said Carlos Palacios, city manager of Watsonville, which pays its outside counsel between $300,000 and $500,000 a year. “We chose to go with a contract attorney because it allows us access to different attorneys who specialize in different areas of the law.”
At its annual policy summit earlier this year, the council identified a review of its attorney services as one of its “Top 12” priorities. Councilman Perry Woodward – a commercial real estate attorney who has voiced concern in the past about Berliner-Cohen possibly over-charging the city even though the firm offers a 10 percent discount on complicated legal matters – rehashed the idea earlier this month. City Administrator Tom Haglund said staff has been preparing data.
One person that staff are likely to speak with is Byron Athan, San Ramon’s in-house city attorney for the past three years. Before Athan, whose office also includes a legal analyst and costs San Ramon about $300,000 a year, the city of about 50,000 east of Oakland paid anywhere between $800,000 and $900,000 a year on two firms, according to city figures.
“The fees were so high, and before anyone who wanted to consult with an attorney had to go through the city manager,” said Athan, a former contract attorney. “Now, my doors are open, and people come in and out all the time – and that’s the way I like it.”
But relying on just one or two people can cause inefficiency and without Berliner-Cohen’s expertise, buying Gilroy Gardens would have taken a lot longer, according to former City Administrator Anna Jatczak, who managed the purchase. Comparing the two camps is like comparing apples and oranges, she said. In addition, “lots” of Gilroy employees called Berliner-Cohen directly when she was there and their requests never seemed to bottleneck.
San Jose-based City Attorney Linda Callon, a lawyer with Berliner-Cohen, has been practicing law for 28 years, according to the State Bar of California. Callon attends nearly ever council meeting without requesting travel reimbursement, according to city figures.
About 87 percent of the time in 2006, Callon charged $210 per hour for about 475 hours worth of general legal services, but she would hike her rate up to $375 and $400 the rest of the time for work on everything from a case regarding contaminated water supply to lease agreements with businesses at the old City Hall building downtown.
All told, Berliner-Cohen staff worked more than 3,000 hours for Gilroy between July 2005 and June 2006 – the most expensive legal year in recent history – which equals about 375 8-hour days.
They covered land, real estate and planning issues that included work on the sports park, the Hecker Pass Specific Plan, the future arts center and a real estate deal with the Gilroy Garlic Festival Association, among other things. Staff also conducted routine reviews of city documents and personnel issues.
If the city hired full-time in-house city attorneys, it could cost the city $30,000 to $40,000 a year per employee in benefits, according to a survey of eight Bay Area cities with in-house city attorneys conducted by the City of Milpitas.
Looking at cities with populations between 50,000 and 200,000, the average in-house city attorney earned about $180,000 annually before benefits. Some cities also had assistant attorneys, who averaged $130,000 annually before benefits, and paralegals and secretaries, who both averaged about $70,000 annually before benefits, according to the study.
Factoring in the in-house attorney office’s more explicit full-time position, the average hourly rate would be about $110 including benefits. However, that cost does not take into effect training and seminars. The city would also need to pay more for litigation costs and labor negotiation and arbitration fees – additional costs Gilroy incurs even with a contract attorney.
In some larger cities such as Los Angeles, Oakland, San Diego and San Francisco, voters actually elect city attorneys.
In order for Gilroy to switch from Berliner-Cohen, at least four council members have to vote for it – as the body did when it hired the firm.
The council has not yet set a date to discuss or vote on whether to switch to an in-house attorney.
