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APS shells out $1.7M in legal fees in 10 months

SchoolDistrictLegalCostsALBUQUERQUE, N.M. — Some numbers for Albuquerque Public Schools:

  • 87,000 students.
  • 15,463 employees.
  • 142 schools.
  • 0 in-house attorneys.

The result: Over the first 10 months of 2015, APS paid nearly $1.7 million to contract law firms and attorneys, with most of that going to the Modrall Sperling Law Firm, the district’s longtime chief provider of legal services. It paid $2.2 million in 2014 for legal services and $2.3 million in 2013, according to figures provided by the district.

The school district, with an annual operating budget of $687.6 million, is the largest political subdivision of the state without a lawyer on staff. Bernalillo County, with a yearly operating budget of $286.4 million, has seven in-house attorneys. The city of Albuquerque, with a budget of $915.3 million, has 30.

ESQUIVEL: Staff lawyers could save $500K a year

ESQUIVEL: Staff lawyers could save $500K a year

Creating and maintaining a staff of in-house lawyers would cost APS money, and the district would probably still need some outside counsel. Still, former Board of Education President Marty Esquivel, a lawyer, estimates the district could save at least $500,000 a year by hiring staff attorneys.

And, Esquivel says, it isn’t just the money. District officials would have a closer working relationship with in-house attorneys than they do with outside counsel, he says. “The board and the superintendent would be advised of problems before they exploded into a public relations nightmare,” Esquivel says.

The Modrall Sperling firm has had a series of contracts with the district since 1985, says Art Melendres, the firm’s lead attorney for APS.

MELENDRES: Firm's lead attorney for APS

MELENDRES: Firm’s lead attorney for APS

“Modrall Sperling has specialists in each area of need for the Albuquerque Public Schools and provides services as requested in those areas,” Melendres says.

Prior to 1985, the district did away with in-house legal staff, he says. APS issues legal services contracts after evaluating competitive proposals from law firms, but it also hires additional attorneys without competition when needed. In addition to Modrall Sperling, APS has at least six other firms or individual lawyers under contract.

HENDRICKSON: District to look at mix of counsel

HENDRICKSON: District to look at mix of counsel

The school district has periodically evaluated its setup for legal counsel, the last time in 2008, says Ruben Hendrickson, chief operations officer for APS. Another review is coming in the next couple years, he says. Modrall’s contract expires in March but can be renewed for another year.

Hendrickson says the district will look at the possibility of a mix of in-house and outside counsel. One advantage of the current setup is access to lawyers at Modrall Sperling with a range of specialities, he says. “If we were to have all those specialists in house, it would be cost-prohibitive,” Hendrickson says.

Like other government entities, APS has a need for lawyers to handle cases involving risk management, workers’ compensation and employment issues. But it also has needs in a range of other areas, including special education, charter schools, food services, law enforcement and medical records.

Board of Education member Peggy Muller-Aragón, chairwoman of the board’s Finance Committee, says that she is concerned about the district’s “astronomical” attorney bills and that savings in costs for legal services would mean more money for classrooms.

MULLER-ARAGON: Concerns over legal bill

MULLER-ARAGON: Concerns over legal bill

Muller-Aragón says the district might have to pay an annual salary of $140,000 for a general counsel but could get young lawyers for $50,000 to $60,000 a year. Attorneys in state government earn as little as $35,000 a year; the highest-paid state lawyer earns about $131,000 annually.

“We could start out with three or four (staff attorneys) and build up from there,” Muller-Aragón says. “We would know more what’s happening if you had someone right in the building.”

Melendres says hiring in-house attorneys for APS is a “decision that the school district would have to make after they did a review.”

Under its current contract with APS – entered in 2013 – the Modrall Sperling firm is paid a flat fee of $1.4 million a year for most of the legal services it provides. The fee doesn’t include workers’ compensation cases, and the firm gets paid extra for bond counsel services (up to $160 an hour) and for lobbying the Legislature ($1,200 per day, plus costs).

It is the first flat-fee contract between APS and Modrall Sperling. The firm was paid on a hourly basis for legal services under its previous contracts.

Other law firms and attorneys that worked for the district last year: Robles, Rael & Anaya; Yenson, Allen & Wosick; Walsh, Anderson, Gallegos, Green & Trevino; Tony Ortiz, and German & Associates.

The Robles, Yenson and Walsh firms are under contracts to provide a range of legal services to APS.

The Robles and Yenson firms represented APS and the Board of Education in a First Amendment lawsuit filed by district critic Charles MacQuigg, who had been banned from board meetings for allegedly disruptive behavior. MacQuigg will get $480,000 in legal fees and $95,000 in damages under a recent settlement with APS.

The Robles and Yenson firms have received a total of nearly $288,000 since 2013 for representing APS and the Board of Education in the lawsuit.

Ortiz represents the district in matters related to the resignation of Winston Brooks as superintendent in August 2014. German & Associates represents APS in a whistleblower lawsuit filed by Don Moya, the former district chief financial officer who was recently reassigned to a financial systems architect position.

Joe Guillen, executive director of the New Mexico School Boards Association, says the association doesn’t have data on how many schools districts in the state have in-house legal counsel but he adds, “Obviously, the large majority of districts are represented by contract attorneys.”

From July 1, the start of its budget year, through November, Rio Rancho Public Schools had spent about $230,000 on outside counsel, according to spokeswoman Beth Pendergrass. The district most often uses the law firm of Cuddy & McCarthy, which also represents other districts in New Mexico.

Pendergrass says the Rio Rancho schools came close to hiring an in-house attorney in 2015.

“But it is difficult to really know if we will save money in the long run,” she says. “While we would be able to use the in-house attorney for a number of things, there are still specialty items that come up that would still require outside specialized counsel. In addition, we would also need to consider hiring an assistant for an in-house attorney.”

Santa Fe Public Schools has a general counsel (annual salary $100,000) but also uses outside law firms (at least $118,000 in 2015). One advantage of the setup: a lawyer who works closer with district officials, says general counsel Ami Jaeger. “We feel we get better service at a lower cost than relying strictly on outside counsel,” Jaeger says.

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