Critics question report on legal counsel for Muscogee County School Board

mrice@ledger-enquirer.comJanuary 18, 2014 

The superintendent has given the Muscogee County School Board a report from an independent research firm that he says helped inform his controversial recommendation to retain the board's legal counsel for another year, but the report equivocates about its "accuracy and completeness" and doesn't identify its sources.

The board is scheduled to vote on the recommendation at Tuesday's meeting. It has been criticized for keeping the Columbus law firm Hatcher, Stubbs, Land, Hollis & Rothschild LLP as the board's sole legal counsel for 63 straight years -- the entire history of the Muscogee County School District. Critics say the no-bid contract precludes the opportunity for other firms to provide the district with legal services. They also say the lack of competition doesn't give Hatcher Stubbs incentive to keep the costs down. Proponents of retaining Hatcher Stubbs say legal counsel is a professional service that can't be compared to bidding for a product. They also say the firm's institutional knowledge is invaluable through decades of practicing education law and counseling the school district.

David Lewis, hired as superintendent in July, sought clarity amid the controversy by relying on Hanover Research of Washington. The board approved the contract with Hanover in October for $90,000 ($30,000 per year over three years) in lieu of filling a position in the research and evaluation department.

Hanover's 20-page report entitled "School District Legal Services Procurement" says its purpose was to "identify and analyze methods school districts employ to procure legal services. Trends in Georgia, Alabama and Texas districts are highlighted, although the report also identifies trends nationwide."

Key findings

Hanover doesn't say whether the board should retain Hatcher Stubbs. Instead, it delivered what it calls key findings:

• "When procuring legal services, the majority of school districts in Georgia and Alabama elect a single firm or a couple of firms of the board's choosing. Districts choosing multiple firms to serve different legal needs benefit from increased specialization among attorneys. However, some districts using this system cite the drawbacks of fee schedule complexities and role confusion when using more than one firm."

• "Maintaining longstanding relationships with specific firms or attorneys, a practice employed by many Georgia and Alabama school districts, has several cited advantages despite potentially higher costs. By maintaining these relationships, districts ensure that their attorneys understand relevant local issues and district history. Firms establishing themselves as a district's long-term partner should expect heightened political scrutiny, both for their constant hand in a district's legal affairs and their appearance as a more costly alternative to a bidding out arrangement."

• "Experts on school district legal affairs in Georgia and Alabama caution against procuring services through bidding processes, and few districts within the states of Georgia and Alabama opt for this potentially cost-cutting arrangement. Interviewed experts argue that the benefits of local contextual knowledge, increased specialization in the many areas of education law, and trust gained by hand-selecting attorneys based on quality outweigh any savings obtained through a competitive bidding process."

• "While very few districts in Georgia and Alabama employ in-house counsels due to their higher sticker price, districts that do report long-term cost savings from risk prevention/management as well as time savings due to risk management and less red tape. Districts considering an in-house counsel should be aware that additional outside legal services must often be procured on top of in-house capabilities when legal expertise in a particular area is required."

• "The majority of school districts in the state of Georgia use monthly/hourly billing systems when hiring outside legal services, as do districts in Alabama and nationwide. Districts that pay retainers, rather than using an hourly or hourly/retainer blended system, often pay more for legal services than those that do not, according to one source. Regardless of the system used, another expert suggests that districts closely monitor legal services bills in order to control costs."

The report contains three sections: Overview of Legal Arrangements; Advantages and Disadvantages of Legal Services Arrangements; and Measuring the Costs of Legal Services.


The report ends with a caveat, which says in part, "The publisher and authors make no representation or warranties with respect to the accuracy or completeness of the contents of this brief and specifically disclaim any implied warranties of fitness for a particular purpose."

That's a red flag to state Sen. Josh McKoon, R-Columbus, who has been among the outspoken critics of the board's no-bid contract with Hatcher Stubbs.

McKoon, who also is a lawyer, asked, "So what is the point of the report if the superintendent is relying upon a document that the authors won't stand behind?"

The Ledger-Enquirer emailed that question and more Friday to Lewis and Hanover. Gretchen Novak, the chief marketing officer for Hanover, said the caveat is the company's standard.

"The language is never modified for a report or client," Novak said. "… Like other independent research firms, we know it is not possible to guarantee that secondary information previously published is 100 percent accurate or that we can guarantee that survey respondents or interview participants are 100 percent truthful in their responses.

"That said, quality assurance processes are practiced by Hanover Research to ensure data is validated and information is verified to the fullest extent possible."

Valerie Fuller, the district's communications director, responded for Lewis.

"Mr. Lewis will fully explain his personal review of the Hanover Research report and several other factors which he used to assist him in informing his current recommendation to the board and the public at the meeting Tuesday," Fuller said.

Lewis mentioned at least some of those factors in an email he sent to board members Tuesday night: "Therefore, given the results of the independent research and evaluation provided by Hanover Research, the historical institutional knowledge Hatcher-Stubbs possesses, the fact that their hourly rate of billing is within or less than the range identified in the evaluation for districts of similar size with no increase since 2005, and the proven track record of success that most recently resulted in the district prevailing in a case dating back to the early 1980's that represents an approximate cost avoidance of $5 million dollars, I will be recommending that Hatcher-Stubbs serve as the district's legal counsel at next week's Board Meeting."

That wasn't good enough for Frank Myers, another outspoken opponent of the school board's no-bid contract with Hatcher Stubbs.

"This report is a thinly veiled attempt to provide political cover for the superintendent in his decision to support a board who hired him," said Myers, a lawyer and political operative who advised the board on its successful 2009 Special Purpose Local Option Sales Tax campaign. "The report is both feeble and sad."

Unidentified sources

Hanover's report says a "significant portion" of its information comes from "interviews with experts in Georgia and Alabama who could present a broad perspective from the attorney, school board and/or district points of view" and "representatives from school districts nationwide regarding legal services preferences and billing systems."

But those sources aren't identified. The footnotes have general citations, such as "telephone interview with Interviewee B."

The methodology concerns McKoon.

"There is no way for a taxpayer or the media to verify any of these claims because you don't know who to contact," he said.

Novak explained, "As standard practice, we keep confidential the identity of survey respondents." She also said Hanover didn't suggest whether the board should retain Hatcher Stubbs because Lewis didn't ask its opinion.

Board reaction

The Ledger-Enquirer emailed the nine board members questions about their reaction to the report and the superintendent's recommendation. Only county-wide representative Cathy Williams and District 8 representative Beth Harris responded before deadline.

Williams called the report "ambiguous, vague and inconclusive. It can be read as support for status quo, for bidding out legal services or for a hybrid. We were not given the qualifications of the three interviewees; we do not have the methodology used for the survey questions; we do not know where the survey responses came from; and we are told that the company should not be considered as having any expertise.

"It is impossible to conclude that this brief is germane to this question. I hope this is not an indicator of the services we can expect for the next three years from this company. If it is, I think we should reevaluate the need for this type of relationship."

Harris, however, asserted that the caveat "was simply saying we (Hanover) did the research. We cannot say that every statement by every person is truthful or substantial."

Harris also stressed that the "purpose of the report was not to make the decision for us but rather to give us information from other sources similar in condition (and) standing as our own circumstances. I see clearly what the majority of school systems choose to do."

Myers noted the board could rely on its affiliation with the National School Boards Association for guidance on this issue -- for free. An excerpt from the association's "Selecting and Working with a School Attorney: A Guide for School Boards" says, "School districts should consider soliciting written proposals to provide legal services from law firms and attorneys who regularly represent school districts within the state."

Myers deduced that the board hasn't followed the guideline because it doesn't "mesh with the result desired by Superintendent Lewis and certain school board members."

Last year, after a heated debate, the board voted 6-3 to approve Hatcher Stubbs. Harris, chairman Rob Varner of District 5, vice chairwoman Pat Hugley Green of District 1, John Wells of District 2, Athavia "A.J." Senior of District 3 and Naomi Buckner of District 4 voted yes. Williams, Mark Cantrell of District 6 and Shannon Smallman of District 7 voted no.

Williams insisted her objections are not criticisms of Hatcher Stubbs.

"I have several friends that are employed at Hatcher Stubbs and would put Greg Ellington's expertise on parliamentary procedure and the Georgia sunshine laws up against any other attorney in the state," she said.

Instead of retaining a sole law firm for legal counsel, Williams supports "the hybrid method."

"I would rather see the administration take a business approach and look at the three or four areas where there would be a benefit from moving that business to firms that specialize," she said. "Would that translate into savings to our taxpayers? The input I have received from my constituents point to yes, it would. It would be both more effective and more efficient. That is what our taxpayers are looking for. The remaining general services could then go to a general services firm such as Hatcher Stubbs."

Dueling statistics

Depending on whose research you value more, the school district's legal expenses are reasonable or inexcusable.

The legal fees the district has paid Hatcher Stubbs more than doubled from $323,254 in fiscal year 2005 to $666,028 in fiscal year 2012. District officials have said the increase comes from an increasingly litigious society. They emphasize Hatcher Stubbs hasn't raised the hourly rates the firm charges the district since 2005 -- $165 per hour for partners and $115 per hour for associates -- and Ellington said Friday the firm isn't seeking an increase in 2014. Jorge Vega, one of the Hatcher Stubbs attorneys who served the school district until Dec. 31, when he left to move to San Antonio, said last year those rates were a deep discount from his regular rate of $325. Ellington declined Friday to disclose his regular rate.

Responding to the continued criticism of the board's legal expenses, the administration in March presented the board a survey of legal expenses, comparing the Muscogee County School Board to other districts in Georgia. The school board spent the sixth-most on legal expenses among the 16 districts that disclosed their fiscal year 2012 expenses, eighth-most out of 18 districts in fiscal year 2011 and seventh-most out of 17 districts in fiscal year 2010, according to the survey. No comparison was done on the hourly rate charged.

Myers, however, countered with a different survey that month. He explained a more valid comparison should be based on the per student cost in legal fees over a five-year period (2008-12). In his survey, he found only two of the 15 districts that responded spent more money on legal fees per student than Muscogee: Fulton and Bibb counties.

Myers argued that Muscogee County's per student legal expenses of $20.77 is more than twice the average of those 15 districts.

"There is no serious dispute that this firm has grossly overbilled the school district and taxpayers of Muscogee County for many, many years now," Myers said Friday.

Hanover, which was hired to provide an independent voice, doesn't settle the dispute in its report. The analysis of legal expenses cites an unnamed source as stating that the average school district in Alabama pays $150 to $175 per hour for legal services, but no Georgia districts are mentioned.

Asked why Hanover omitted Georgia, Novak replied, "Our research focused on legal services and billing practices, not legal services costs. During the course of our research, however, we found the information provided in Appendix B, so we included it as an appendix."

As for annual legal expenses, Hanover's report cites only the district in Irving, Texas, whose enrollment of 34,851 is similar to Muscogee's, and spent $654,785 on legal fees in 2011 and $807,087 in 2010.

Final question and answer

McKoon compares the board's new relationship with Hanover to the ongoing relationship with Hatcher Stubbs.

"The irony of entering into a three-year, $90,000, sole-source, no-bid contract to defend a 63-year, sole-source, no-bid contract is unbelievable," said McKoon, who plans to file a bill reforming the procurement process for school boards. "But I've learned in the last year that the board of education will do anything to protect this deal. The question I still don't have the answer to is why?"

Harris offered an answer.

"We choose one long-standing relationship with professional services because of the knowledge they have and the trust such a relationship brings with it," she said. "It has been said that Hatcher Stubbs has not been evaluated in all these 63 years. I would argue that just as a teacher evaluates a student with each task and every exam, so do we likewise evaluate this firm. Each board member and each superintendent from every board sitting for these 63 years has evaluated it case by case, year after year. That's a lot of evaluation in my opinion."


What: Muscogee County School Board meeting

When: Tuesday, 6 p.m.

Where: Muscogee County Public Education Center, 2960 Macon Road

Info: 706-748-2000

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