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The profit motive may be fine for a lawyer in private practice, but we expect different values in state attorneys general. An attorney general, as a state’s chief law enforcement officer, is vested with the authority to enforce criminal and civil laws. With this significant authority comes great responsibility. State attorneys general are granted broad discretion to set priorities over which civil and criminal cases they prosecute; to determine how they prosecute these cases; and to select the individuals, organizations, and law enforcement officials with whom they work to pursue justice. This discretion and independence is critical. The attorney general must be a faithful servant both to state laws and to the citizens the law protects. Today, however, a trend has emerged that increasingly threatens the independence of the attorney general and creates a conflict between public benefit and private profit. In states across the nation, private lawyers are being hired on a contingent fee basis to conduct work that should be done by the attorney general’s office. As a former attorney general, I worry that too much authority is being turned over to outside lawyers. I am concerned that these relationships with plaintiffs lawyers may raise serious ethical questions, involve the transfer of huge sums of money, and undermine the integrity and independence of the attorney general’s office. And I fear that when elected officials take contributions from those who benefit under these litigation arrangements, the public’s trust in our system of government is further eroded. STARTING WITH TOBACCO Hiring outside counsel to assist the attorney general isn’t a new phenomenon — attorneys general in many states look to the private sector for legal expertise and assistance in prosecuting complex civil and criminal cases. In such instances, outside attorneys are typically paid by the hour, and the costs are well documented and fully disclosed. A new trend emerged in the mid-1990s, however, when more than 40 states signed up a handful of personal injury firms to contingent fee contracts to pursue litigation against the tobacco industry. The settlements that resulted from state tobacco litigation generated hundreds of millions in fees for the private lawyers involved. It also pioneered a new model for state-sponsored litigation that combines the prosecutorial power of the government with private lawyers aggressively pursuing litigation that has the potential to generate hundreds of millions — or billions — of dollars in contingent fees. As the U.S. Supreme Court noted in Berger v. United States (1935), an attorney representing the state “is the representative not of an ordinary party to a controversy, but of a sovereign whose obligation to govern impartially is as compelling as its obligation to govern at all.” Contingent fee arrangements introduce a powerful private-profit motive into state-sponsored litigation. These contracts typically award private lawyers one-fourth to one-third of any settlement or judgment obtained by the state — and nothing if the state loses. With few standards in place to regulate these contingent fee arrangements, it’s a real question whether public justice or private profit is the principal interest of outside counsel who are encouraging the attorneys general to bring this litigation. Consider a few examples: •�West Virginia’s attorney general has appointed local plaintiffs lawyers to the post of “special assistant attorneys general” to represent the state in litigation. These special assistants are often hand-selected by the attorney general without undergoing a competitive bidding process. Of the more than 4,000 trial lawyers in West Virginia, the attorney general works with fewer than 20 select lawyers. The settlements obtained in these cases often have been structured to pay the outside lawyers first, before giving any money to the taxpayer-funded state agencies that are the actual plaintiffs. •�Connecticut’s attorney general recently retained a Seattle-based personal injury law firm to file suit against pharmaceutical manufacturers over prescription-drug pricing. This occurred even though the attorney general’s office employs enough of its own lawyers to make it one of the largest law firms in Connecticut, and the law firm hired doesn’t even have an office in the state. This same law firm gave a presentation to a conference of attorneys general and urged attendees to initiate this litigation in their states en masse. •�After Maryland’s settlement with the tobacco industry, Peter Angelos, the outside lawyer who represented the state, filed a lien against the settlement because of a dispute over his contingent fee. “It’s gotten turned around so that the attorney is telling the client what to do,” said Maryland’s assistant attorney general. FLAWED JUSTIFICATIONS Supporters of the practice claim that hiring outside counsel on a contingent fee basis is a risk-free proposition for the state. They reason that if the attorney general loses, he or she owes the private lawyers nothing. If the state wins, then the lawyers’ fees come directly out of any recovery at no cost to the state. This justification is flawed. Generally, civil litigation initiated by the state is designed to recover funds to which taxpayer-funded agencies and programs are legally entitled. A fee arrangement that diverts up to one-third of any settlement or recovery to pay private counsel may not be the most efficient for the government agencies and programs that serve a state’s citizens. Moreover, counsel retained on a contingent fee basis typically do not maintain records of the time spent on the state’s matter. As such, states have little way of knowing the market value of the legal services or whether an hourly fee arrangement with qualified counsel could have returned more taxpayer money to state agencies and programs. Further, few standards are in place to govern how these contingent fee contracts are awarded. Unlike state contracts to build a road or bridge, which are typically awarded to qualified firms through an open and competitive bidding process, contingent fee contracts with potential values in excess of $100 million have been awarded without competitive bidding — and in secret. In some cases, the awards process has raised allegations of political cronyism or worse. One former Texas attorney general was even jailed for his role in a scheme to divert contingent fees won in state tobacco litigation to a political ally who had no known role in that state’s litigation. OUTSIDE INFLUENCE? With elected officials (on both the state and federal level and from both parties) facing ethics charges, our states’ chief law enforcement officials must take every precaution to insulate their official duties from even the appearance of inappropriate or undue outside influence that threatens the independence of the office. Citizens and taxpayers should know if litigation initiated by their state is being initiated at the behest of a law firm that could profit substantially from the outcome. Fortunately, a number of states have reformed their laws. These reforms do not ban the practice of hiring outside counsel on a contingent fee basis. Instead, they bring greater transparency, accountability, and standards to the practice of retaining plaintiffs lawyers with no-bid, contingent fee contracts. When I was Virginia’s attorney general, the General Assembly acted on my proposal and changed state law to prohibit state agencies from entering into large contingent fee contracts with private lawyers unless the contracts were put up for competitive bids. Similar laws have been enacted in Texas, Kansas, Colorado, and North Dakota. Attorneys general should embrace these laws, and they should be enacted in every state. Establishing clear firewalls in every state between the public duties of the attorney general’s office and the for-profit agenda of private plaintiffs attorneys would go far in maintaining the independence and dignity of the office. It would help prevent even the appearance of impropriety. The office of attorney general should epitomize the highest standards in legal conduct. The office and the citizens it represents deserve nothing less.
Jerry Kilgore is a partner in the Richmond, Va., office of Williams Mullen, where he is chairman of the multistate corporate compliance and public policy group. Kilgore served as Virginia’s attorney general from 2002 to 2005.

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