By Shawn Raymundo
The government consulting firm Management Partners has been tapped by the city council to assess and audit Best, Best & Krieger’s bills to the city—a process to see whether the law firm has provided adequate services, as well as potentially open the door for new legal representation.
The council on Tuesday, Nov. 17, decided, in a 3-1 vote, with acting Mayor Laura Ferguson opposed, to authorize a $34,500 service contract with Management Partners. The firm will be tasked with reviewing BB&K’s legal bills, which amounted to more than $8.4 million between Fiscal Years 2016 and 2020, according to the city.
“I think an audit is appropriate after a vendor has been with us for five years,” Councilmember Gene James said during the council’s meeting last week. “It’s only fair to the taxpayers and the city to look at how they’ve performed.”
Along with Councilmember Kathy Ward, James led the solicitation process in finding a consultant interested in assessing the city attorney’s costs, stating that the results of the audit would give the council “objective data that we’ll need to make an informed decision.”
Such a decision would include whether to retain BB&K, initiate a new request for proposals to solicit law firms with which to contract, or consider hiring a full-time in-house city attorney.
“This legal review, council asked for this to come back, so we can be transparent to our residents and let them know the truth of our legal billings, instead of what is cited on social media and comments made,” Ward said. “We just want everyone to know exactly what we’ve paid and what we’ve gotten for it.”
The city has previously noted that the more than $8.4 million BB&K has charged the city over the past five fiscal years represents general and specialized services, which include “litigation and other non-routine legal services.”
When the council voted to assemble the subcommittee comprising James and Ward in mid-September, giving them the responsibility to solicit firms for the job, they were expected to review proposals from Deloitte Legal Management Consulting, Management Partners and RSG.
Acting City Manager Erik Sund told the council on Nov. 17 that the city could only obtain proposals from Management Partners and RSG, because Deloitte no longer had staff in its division that handled such legal reviews.
According to the city staff’s report, Management Partners submitted the lowest bid price of $34,500, covering 176 hours of work. RSG’s bid came in at $114,200 for 610 hours of work.
Noting that both firms were qualified for the job, Ward said Management Partners “had a distinct advantage,” because it had experience conducting legal reviews for beach cities similar to San Clemente.
Ferguson, who issued the lone no vote on the contract, questioned why the city didn’t solicit proposals from bona fide “legal fee auditors” before also stating that the bid price is low compared to the industry standard, and was thus concerned the council wouldn’t get its desired results from the review.
“I’m just concerned that we’re going to get what we’re looking for,” she said, adding: “This is for $34,000, which seems pretty low, and I just don’t know that we’ll get what we’re looking fo considering the industry standard.”
Responding to her questions and concerns, Sund said it was the council’s direction in September to move ahead with soliciting proposals from just the three firms, saying it could have suggested other vendors at that time but didn’t.
He also stated that it’s the intent of the review to provide Management Partners “all of the history to date with (BB&K) to do that review,” with the caveat that staff would have to first go through them “from a confidentiality standpoint so that they can’t share those bills, because those bills aren’t typically available to the public, because they break down the hourly cost.”
In FY 2015-2016, the first year of the city’s contract, BB&K’s total bill was just shy of $1.8 million. The following year, legal costs amounted to more than $1.95 million, while FY 2018 and FY 2019’s bills came out to about $1.66 million and $1.6 million, respectively. This past fiscal year, FY 2020, the city was charged just a little over $1.4 million.
Shawn Raymundo
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.
This matter can be resolved very quickly be simply retaining an independent legal auditing company to review all legal fees and documented expenses. Make sure the company has a full time staff of experienced lawyers and forensic accountants who if necessary is qualified to testify as to the audit findings. This should not be an adversary process but instead a process of transparency and responsible oversight thereby removing any doubts about what was charged to the city and creating trust and confidence as to how tax payers money is being spent by local officials so this should be a win win for all parties in question.
Also this is NOT a review that should be completed by any CPA firm as it is well beyond their expertise and the results will be totally disappointing and the legal fees will still be under suspicion.