MAYOR-ELECT BROWN RECOMMENDATION FORM 1. Committee: Transition Legal Committee (TLC or Committee) 2.

Presented to Mayor Brown on August 8, 2011 3. Description of Actions Taken by Committee: The TLC held five meetings in the course of its work. Each meeting was preceded by public notice and was open to the public in accordance with Floridas Sunshine Law requirements. During those meetings, the TLC held discussions with several guests who were invited based upon their knowledge of issues relevant to the Committees work, including operations of the Office of General Counsel (OGC) and its relationships with its clients. The invited speakers and information provided included the following: 1) General Counsel Cindy Laquidara; 2) Former General Counsel Fred Franklin; 3) Circuit Judge and Former General Counsel Charles Arnold; 4) Former Jacksonville City Councilman Howard Dale; 5) Deputy General Counsel Steven Rohan; 6) Jacksonville Electric Authority CEO Jim Dickenson, including follow-up information; 7) Jacksonville Electric Authority CFO Paul McElroy; 8) Deputy General Counsel Howard Maltz;

9) Inquiries via electronic mail to former General Counsels, city constitutional officers and independent authorities; 10) Former General Counsel Rick Mullaney through the Committees staff liaison; 11) Duval County Superintendent of Schools Ed Pratt-Dannals (through a Committee member); and 12) Duval County Public Schools Human Resources Director Vicki Reynolds (through a committee member). 13) Overview and detailed budgetary documents relating to the OGCs budget for fiscal years 2009-10, and 2010-11. 14) Background information on the organizational structure and clients of the OGC, and a document discussing the work of the OGC prepared by Deputy General Counsel Howard Maltz. 4. Issues/Observations: a. Budgetary Issues i. Attorney Billing The OGC engages in a billing process similar to that found in many private law firms. Specifically, the OGC records the hourly work of its attorneys and then charges the client agencies and independent authorities an amount equal to the number of hours worked by attorneys within the office on a given legal matter multiplied by the established billing rate. The practice of tracking billing hours for OGC attorneys is intended to have a twofold purpose: A. Tracking the hours worked by attorneys allows the OGC to monitor the utilization of its attorneys and the efficiency of the legal services being rendered; and B. Tracking the billing hours of the OGC attorneys is necessary in order to furnish bills to clients of the OGC that are deemed independent authorities (e.g., JEA, Jacksonville Aviation

Authority, Jacksonville Housing Authority, Jacksonville Port Authority, Jacksonville Transportation Authority, Duval County School Board). The distinction between these entities and the many City departments and agencies is that the School Board and Authorities must compensate the OGC for the work performed in actual dollars from their budgets. Legal work performed for departments is essentially a bookkeeping matter consisting of no actual payment of funds. Consequently these billing / legal representation dynamics to the Authorities and School Board have material impact on actual taxpayer dollars. The Committee learned that the billing rates set by the OGC are arbitrary in nature, and do not necessarily correspond to the complexity of the legal work being performed, or to the prevailing market rates for comparable legal services rendered by attorneys in private practice with the same level of experience. For most of the OGCs clients, such as the offices of the Executive Branch or the City Council, the billing rates set by the OGC are immaterial since the expenses associated with providing their legal services are ostensibly covered in full by the OGCs budget. However, the independent authorities pay real money to the City for the legal services rendered by the OGC. It is acknowledged that the independent authorities typically pay substantially less money for legal services received through the OGC than would be the case if the services were acquired through a private law firm. However, the TLC also heard from clients who felt they could save significant sums of money from their legal budget if they were permitted to hire their own in-house general counsel with experience in highly specialized legal areas, such as energy regulation and special education. Additionally, it was suggested to the Committee that the billing rates of the OGC are not intended to be set according to prevailing market rates, but rather with the goal of partial cost recovery for the legal services rendered. ii. Control of Certain Components of OGC Budget The Committee learned that the OGC currently lacks effective control and perhaps, the ability to provide any meaningful input on several components of the OGCs budget that can

greatly affect its work. Chief among the areas where a lack of control is problematic are expenditures relating to information technology (IT). The OGC has an need to implement functional IT consistent with the demands of a comprehensive law practice, and the Committee learned with marked astonishment of makeshift measures used by OGC attorneys and staff to cope with the shortcomings of the current IT infrastructure. The TLC also learned that the City presently may lack sufficient underwriting for First Amendment claims, an issue that has posed great difficulty in other jurisdictions. Additionally, the Committee received input that while the OGC budgets sufficient funds to pay judgments related to personal injury claims, the City does not allocate funds for the payment of general litigation claims and risk management. b. Conflicts

In the practice of law, attorneys are generally prohibited from simultaneously representing clients with adverse interests. However, the prohibition on representing clients with adverse interests does not often extend to the work of the OGC, which frequently counsels clients that often find themselves in adverse positions (e.g., the Mayors office and City Council). On repeated occasions, the TLC heard from individuals who raised examples of conflicts that may arise in the course of the OGCs work. In one instance, a client sought counsel from the OGC relating to a franchise fee levied by the City government, and the OGC responded that the fee was impermissible. Since the fee had already been levied for several years, the client questioned whether the OGC had previously determined that the fee was improper, communicated the possibility of illegality to the City government, or would have acted (i.e., deemed the fee impermissible) in the absence of the request of the client. Additionally, the Committee learned that attorneys in the OGC do not receive formal training in the identification and handling of conflicts that may arise. c. Relationship Between OGC and its Clients

The TLC frequently heard positive commentary on the quality of the legal work performed by the OGC. The Committee also received repeated suggestions that the OGC is the best entity to

address legal issues and concerns common to all of its clients, such as labor and employment law matters and litigation claims common to all city entities (e.g., premises liability claims). However, the Committee identified an issue with legal specialization specifically, in ensuring that lawyers with experience in areas of law unique to a particular client are assigned to that client. One client represented that when an attorney is assigned by the OGC, the client expends considerable time and resources in familiarizing the attorney with specialized knowledge unique to the clients work. Unfortunately the client is often frustrated by the reality that the lawyer is often reassigned by the OGC not long after having acquired the specialized knowledge, forcing the client to again devote time and resources on another newly-assigned attorney. Additionally, it was suggested to the committee that independent authorities may have their unique legal needs better addressed by having their own general counsel or staff of lawyers with experience in specialized areas (see discussion above). d. Qualifications For Serving as General Counsel

While the TLC will not play a direct role in the selection of the next General Counsel, the Committee nonetheless was informed of several qualifications that the Mayor-elect should consider in selecting a new General Counsel: Management experience, preferably in a large firm; Approaches the position without a careerist view and without any self-serving interests; Some expertise in government law & litigation; Well-respected in the entire legal community; Apolitical approach; Demonstrated ability to exercise independent legal judgment; Ability to recognize and address conflicts related to representation; and Familiarity with alternative dispute resolution.

Additionally, it has been suggested to the TLC that the next General Counsel should have some 5

experience addressing legal issues in the context of a consolidated government. The Committee heard conflicting suggestions regarding the search for the next General Counsel, with one speaker suggesting the General Counsel should come from Jacksonville to give confidence to the legal community, and another speaker suggesting that a national search for a General Counsel should be conducted to find candidates experienced in government law.

5.

Recommendations: Permit the OGC to provide substantial input towards its budget allocations and needs. Retain the OGC representation of all clients (even those with specialized needs) for legal needs common to all City entities. Require the OGC to discuss with its lawyers the recognition of conflicts. Review and revise the fee structure and billing rates assigned to lawyers and clients within the OGC such that the rates have a meaningful correlation to a budgetary need.

______________________________________ Committee Chair

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