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Legal fees can grow quickly for cities

Connie Moran

Connie Moran

Jason Shelton

Jason Shelton

With attorneys commonly charging $100 to $150 per hour, it can take a big bite out of a city’s finances for legal fees, especially for cities that have been involved in annexation battles. In the 2013 calendar year, the City of Biloxi paid $581,741 to one law firm, Page, Mannino, Peresich & McDermott, PLLC. Biloxi paid another $127,088 to Michael P. Collins, and $306,368 to Carroll Warren & Parker. Biloxi’s total cost for legal services in 2013 was more than $1 million.

In these days of very tight budgeting, some Mississippi cities have opted to save money by hiring an in-house attorney. Gulfport, for example, uses outside counsel in addition to matters handled by City Attorney Jeff Brunini.

“The specialized knowledge of municipal law and access provided by an in-house legal department coupled with the experience and skills of outside general counsel provides enhanced resources and support for the city’s administration, council and departmental functions,” said Chris Vignes, public information officer for the City of Gulfport. “The combination of in-house and outside general counsel can result in an improvement in the quality and delivery of legal services to the city and greater operational efficiencies, saving the city money in the long run.”

The City of Tupelo expects that it will save in the neighborhood of $150,000 to $200,000 per year by hiring an in-house attorney whose salary package is $90,000 per year. Tupelo Mayor Jason Shelton said legal bills from the law firm that has handled Tupelo’s legal needs for many years, Mitchell McNutt & Sams, were running in the mid-$300,000 range per year.

“The two things that jump out about the advantages of an in-house counsel is convenience and cost savings,” Shelton said. “Our in-house attorney is just that. He is here when we need him. We can walk over to his office. We can get him to attend a department head meeting or any type of staff meeting. We don’t get a bill for attending those day-to-day meetings to make sure we are in compliance, and what we are doing is by the books.”

Ben Logan took over as in-house legal counsel effective Oct. 1. Shelton said there was a bit of resistance to the change as Mitchell McNutt & Sams had been handling Tupelo’s legal needs for 36 of the past 40 years.

“We did a compromise in the budget process,” Logan said. “We allocated $60,000 for outside council to be available to represent the City of Tupelo for any overflow work, anything we needed some sort of specialty for, or if the in-house council had a conflict of interest or couldn’t do it. The total budget for the legal department is $180,000. I think we will save a lot of money. I don’t see any real negatives to it.”

Shelton said part of the compromise agreed to was that spending will be evaluated quarterly to make sure the city is truly saving money, and to make sure the city is being adequately represented. The City Council approved a fee increase from $130 to $150 per hour for Mitchell McNutt & Sams.

“Mitchell McNutt and Sams are a tremendous law firm,” Shelton said. “They are one of the best in the state, and have had numerous Mississippi Bar presidents. There was no problem with that firm. They continue to be our outside legal counsel. The decision was simply that of economics. The attorney we hired is a former alderman for the City of Tupelo. He is currently the mayor of Sherman. He had a very diverse general practice law firm in his private practice. He has military experience. He is a unique fit for us in Tupelo, and we are fortunate he was willing to accept this job for his hometown.”

If Logan attends a meeting and it is apparent he isn’t needed, he can leave to go back to his office. Or, if something unexpected comes up, he is close by. By contrast, if they had a three-hour meeting and outside legal counsel was there just in case legal advice was needed, the city still got billed for those three-hour meetings, Shelton said.

As part of the process of deciding to hire a city attorney, Tupelo compiled a list of what other cities in the state do for legal counsel. Shelton said they liked the model of Gulfport, where there is an in-house legal department combined with outside counsel.

One case where Tupelo needs outside counsel is regarding an annexation by Sherman. Since their attorney is mayor of that town, it would be conflict of interest for him to represent Tupelo in those proceedings.

“There was no opposition to the annexation,” Shelton said. “It was a smaller annexation by Sherman that didn’t have an impact on Tupelo.”

Another city that has recently worked to restrain legal spending is the City of Ocean Springs. The Ocean Springs Board of Aldermen recently voted for a 2.5-year contract with John Edwards and the Dogan & Wilkinson PLLC law firm to act as city attorney at a rate that is $1,800 less per month that what was previously charged. The city took bids before negotiating a new rate, and is currently budgeting $170,000 per year for legal services.

Mayor Connie Moran said the legal fee contract was part of the city’s ongoing efforts to reduce the cost of doing business without compromising quality services to residents.

“Our aldermen serve on various committees to oversee the budget and solicit proposals from service firms who vie competitively to maintain our business,” Moran said. “In lean economic times, it is critical that the public sector do more with less, just like a private company.”

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