Blawgletter just spotted a thoughtful anti post on the wisdom of using contingent fee arrangements to hire private counsel to prosecute public claims.  The post, in Bogartyag’s Weblog, summarizes the recent spate of attention to the issue.  Then it gives four arguments against contingent fee deals with public entities:

We don’t have much to add to our previous post on this issue, but we’d like to highlight a few points as to which we don’t see much disagreement in the blogosphere.

First, even those who favor governments hiring contingent fee lawyers (and we do not count ourselves in that crowd) can’t seriously object to adding more transparency to that process. If the government is going to enter contracts that have the ability to make select private citizens richer than Croesus, that process should be open and public.

Second, no one seems to object to competitive bidding for these lucrative contracts. If the government is going to hire private lawyers, surely it should strive for a reasonably low price. (We didn’t write the “lowest price” there, because we believe that the cheapest lawyer is not necessarily the lawyer most likely to win your case.)

Third, when governments hire private contingent fee lawyers, those lawyers have a personal interest in maximizing the recovery of money damages, from which the fee will be paid. Maximizing damages, instead of seeking, say, broader injunctive relief, will not necessarily represent the preferred public policy. We know that the client — the government — is ultimately making the decision to settle, but even the most sophisticated client relies heavily on counsel — the boots on the ground — for advice. When that counsel has a personal interest in maximizing monetary recovery, sound government policy can be placed at risk.

Fourth, permitting the executive branch — attorneys general — to extract private money for government use infringes on the legislative branch’s historic control of the government’s taxing authority. We understand that this already occurs, to a limited extent, when the government imposes civil fines and the like. Call us fools, if you like, but we just think people act differently when billions of dollars are placed on the table.

The first three points strike us as worth talking about.  Indeed, we would like to see someone develop a set of guidelines for hiring private counsel on a contingent fee basis, including discussion relating to (1) transparency, (2) competitive bidding, and (3) oversight and allocation of decision-making authority on matters of strategy, trial, and settlement.

The fourth argument — that contingent fees infringe on legislative prerogatives — seems a tad over the top.  Do we really want senators and representatives dictating to attorneys general which specific lawsuits to prosecute and which ones not to?  That way lies madness.

Feedicon_2 It’s a bit nutty.