Virginia Governor Terry McAuliffe recently vetoed a bill that would have required public posting of most state contracts with private lawyers.  The bill’s sponsor, Mark Obsenshain (R-Harrisonburg), wrote that “the legislation would have enhanced transparency for the procurement of outside counsel through the Office of the Governor or the Attorney General.”  Governor McAulliffe disagreed and vetoed the bill because it “would needlessly impose harmful restrictions on the ability of the Commonwealth to secure specialized legal services and prosecute its cases.”

Senate Bill 1059 called for the governor or attorney general, as applicable, to post contracts and payment records for private counsel on their websites for the duration of the contracts.  It would have required the Attorney General to put in writing findings that outside help is needed, an estimate of the time and labor involved, the geographical area involved, and the amount of experience needed and available through the outside lawyers.  The legislation called for annual reports on each contract and would have placed caps on contingency fee contracts starting at twenty-five percent for recoveries up to $10 million, with reduced percentages for additional amounts over $10 million.

In his veto, Governor McAuliffe wrote that the bill “would unnecessarily hamstring the Attorney General from securing the quality of legal assistance he may, on occasion, need to advance those rights and interests.  Further, the bill would interfere with the Office of the Attorney General’s ability to secure sufficient representation for certain employees of the Commonwealth, including law enforcement.”

Use of outside counsel in state-level litigation has become an increasingly popular tool by state attorneys general in recent years.  In a December 2014 article, The New York Times described the trend as “flourishing industry that pairs plaintiffs’ lawyers with state attorneys general to sue companies.”  In these suits, attorneys general hire the private firms to do the necessary work, with the understanding that the firms will front most of the cost of the investigation and the litigation.  The firms take a fee, typically twenty percent, and the state takes the rest of any money won from the lawsuit.