City hires pricey outside lawyers in public records case

Experts question the high fees and the choice of legal firm.

At rates of up to $855 an hour, Atlanta has retained two attorneys from an international law firm to manage its response to a GBI investigation into open records violations, The Atlanta Journal-Constitution and Channel 2 Action News have learned.

Legal experts endorsed the city’s need to retain an outside law firm to handle the case because the city itself is the subject of the investigation.

But the experts questioned the high fees and the choice of firm: Holland & Knight was paid $89,000 to advise the city on open records compliance during months in 2017 when news organizations were engaged in disputes with the city over public records.

Many of those disputes are now part of a formal complaint the AJC and Channel 2 filed with Attorney General Chris Carr on Wednesday over the city’s alleged noncompliance with open records laws during the administration of former Mayor Kasim Reed. Two of them pertain to issues under GBI investigation.

Holland & Knight employed Reed as one of its partners before he was elected in 2009, and the lead attorney assigned to handle the GBI investigation is Robert Highsmith, a partner who represented Reed in a private legal matter in 2013. Highsmith also represented Reed’s campaign in the 2009 mayoral runoff recount, served as chairman and treasurer for political committees associated with the former mayor, and is the city’s lobbyist.

At a minimum, experts said, the selection of an outside law firm should have been considered and approved by City Council to ensure the independence of the attorneys’ work. Instead, City Attorney Jeremy Berry, whose handling of an AJC records request is one of the matters being investigated by the GBI, negotiated the firm’s involvement.

In response to questions from the AJC and Channel 2, Berry and Highsmith denied any conflicts of interest. Berry said he is empowered as city attorney to hire outside attorneys, and said Holland & Knight’s open records work for the city in 2017 was unrelated to either the GBI’s investigation or the AJC/Channel 2 complaint with Carr.

Highsmith noted that he has advised several other clients in open records issues, and helped MARTA mediate a settlement with the attorney general’s office in 2012.

“Our direction is to ensure compliance going forward, and that is the direction coming from all executive functions of the city — mayor, the city attorney,” Highsmith said. “We’re there to ensure compliance.”

But the circumstances surrounding Holland & Knight’s involvement raise questions about the independence of the outside counsel and its representation of the city, legal experts told the AJC.

“Typically, you’d bring in somebody who has a blank slate and someone who has no reason whatsoever to have their impartiality questioned,” said Lester Tate, former president of the state bar.

Attorney conduct is governed by the Georgia Rules of Professional Conduct, which say lawyers “shall not represent ... a client if there is a significant risk that the lawyer’s own interests or the lawyer’s duties to another client, or former client ... will materially and adversely affect the representation of the client.”

The city retained Holland & Knight on March 13, the same day the attorney general’s office disclosed a criminal investigation into open records violations related to an apparent effort by the city’s communications office to delay a Channel 2 request for water billing records.

The next day, Highsmith notified Berry that his billing rate was $855 per hour, less a 10 percent discount. John Brownlee, a noted white collar defense attorney from Holland & Knight’s Washington, D.C., office, was to be paid $950 per hour, less the 10 percent discount.

“We look forward to working with you to bring this matter to a successful conclusion,” Highsmith wrote.

Highsmith signed a document stating his firm “is not aware of any actual or potential conflict of interest in undertaking the required work for this matter.”

Potential conflicts

Retaining Highsmith is questionable because the alleged open records violations happened while his firm was advising the city on open records matters, said Clark D. Cunningham, a law professor at Georgia State University and W. Lee Burge Chair of Law and Ethics.

“Particularly at a time when the integrity and transparency of city government is so much in question, I think it shows poor professional judgment,” Cunningham said.

J. Tom Morgan, a former DeKalb County district attorney, also questioned whether Berry should have been the one to hire any outside counsel.

“It puts Mr. Highsmith in awkward position if his role in handling this investigation could be jeopardized by the person (Berry) who hired his firm,” Morgan said.

Last year, the AJC requested legal bills the city incurred from an outside law firm to respond to the ongoing federal bribery investigation of City Hall.

Berry provided documents that he said showed the costs incurred by the city from law firm Baker Donelson as part of the city’s response to the pay-to-play scandal. Berry presented the documents as invoices, but an AJC investigation in March showed the documents weren’t actual invoices.

Morgan said because Berry’s actions appear to be under scrutiny by the GBI, City Council should have been consulted and voted on whether to employ the firm to avoid any appearance the firm’s work isn’t independent.

Pricey legal fees Experts also questioned the cost of Holland & Knight’s legal fees, which are several times the hourly rates of outside counsel retained by the city in a recent case, and by the state and some local governments.

An AJC investigation in 2011 found outside lawyers involved in the Atlanta Public Schools cheating scandal were paid less than $200 an hour. In November, Channel 2 reported that the attorney general’s office was paying former Gov. Roy Barnes $250 per hour to represent the secretary of state’s office in an elections case in federal court.

Just last month, the city retained attorneys to provide legal advice on the recent cyberattack, at a maximum rate of $485 per hour.

Morgan called Holland & Knight’s hourly fees “pretty steep.”

“That’s the corporate rate that AT&T would pay,” he said, “but I’m not sure why the city of Atlanta should be paying that.”

In response, Berry noted that the firm offered the city a 10 percent discount.

“Given the gravity of the allegations and the importance of complying with the Open Records Act, the City selected outside counsel with experience in such matters,” Berry said.

Berry also noted “Brownlee’s significant experience as a prosecutor and in handling high-profile government investigations” as reason to hire his firm.

Atlanta City Council President Felicia Moore blanched at the amounts being charged by the firm: “Oh, Lord; you’re making me get religion.”

Moore previously drafted legislation, introduced by councilman Dustin Hillis, that would require the city attorney to seek City Council approval before retaining any outside law firm that is likely to charge more than $50,000 within a fiscal year.

“I’m extremely concerned about how we’ve trended upward over and over, year after year” with spending on outside law firms, Moore said. “We don’t even know what they are representing us for. I believe the governing body of the city should know what our legal liabilities are and how much we are paying.”