Making the Case for Legal Contract Transparency

We all know better than to double dip.

It is the epitome of bad manners. Highly frowned upon.

And if you’re a county official in Texas, it’s also illegal. But that didn’t stop one county attorney.

According to the Southeast Texas Record, David Garcia, the Brooks County attorney, has signed a private contingency fee contract to represent Brooks County in an opioid lawsuit. Garcia and his law firm are named as co-counsel along with another firm that is involved in at least one other opioid lawsuit in the state.

Under the terms of the contract, the private attorneys would receive 35 percent of any recovery the county is awarded, one of the highest percentage fees being paid by a local government in Texas for opioid representation. That fee is split 50/50 between the two firms.

So, not only is Garcia continuing to draw his taxpayer-funded salary as Brooks County attorney, but under the contingency fee contract between his firm and the county, he is also entitled to receive 17.5 percent of any money the county recovers in the lawsuit.

Therein lies the problem. The Record highlights this important provision of the Texas Local Government Code: “If a county officer is paid an annual salary, the state or any county may not pay a fee or commission to the officer for the performance of a service by the officer.”

In other words, Texas law prohibits the type of double dipping that seems to be happening in this instance.

This case raises a number of questions. If Garcia, as the Brooks County attorney, felt it was necessary to hire additional legal help for this lawsuit (either because he didn’t have the expertise or the bandwidth to handle it in his official capacity), why hire himself? Doesn’t that leave him in the same position as when he started… only with more money in his pocket?

How did this slip past the Comptroller’s Office, which approves contingency fee legal contracts between private attorneys and local governments?

While this story is vexing, it is also a perfect example of why House Bill 2826, which was passed by the Legislature this session, is critical for transparency in legal contracting in Texas.

As we’ve discussed, HB 2826 puts important safeguards into the law to ensure taxpayers have the full picture of why a private attorney is being hired to do the government’s legal work, and ensures that the local government keeps the bulk of any award it receives in a lawsuit.

Importantly, the bill brings transparency into the process by requiring local governments to publicly post that they are seeking to hire a private attorney to pursue the government’s business. The new law will require the local government to hire a well-qualified attorney to handle the specific litigation, rather than hiring an insider (like has happened in Brooks County and other places) or an attorney who has solicited the government’s business.

Additionally, after HB 2826 becomes law, contracts for legal services will have to be based on a reasonable hourly rate, not a percentage rate like the one Brooks County is paying. HB 2826 also moves the approval of these contracts out of the Texas Comptroller’s office and into the Attorney General’s office—a change the Comptroller requested this session. It makes far more sense for the state’s top lawyer to review and approve contracts between local governments and private attorneys than the state’s accountant.

House Bill 2826 was TLR’s top priority this legislative session. We hope the governor will sign it into law soon. We also hope it will prevent double dipping and insider dealing from happening in the future.