DeKalb schools overspent on lawyers

By Megan Matteucci

The Atlanta Journal-Constitution

DeKalb County schools spent six times what they had budgeted for legal expenses last year and have stalled on looking for a new attorney.

Records obtained by The Atlanta Journal-Constitution show the troubled school system paid lawyers $5,792,239 from July 1, 2009 t0 June 30, 2010. That includes money for 16 firms, although the district’s budget only calls for two firms.

The legal bills -- which were more than the those of Cobb, Fulton and Clayton schools combined -- come at a time when DeKalb is cutting tens of millions out of its budget and laying off hundreds of school employees.

“The costs are more than we expected, but mainly because of the DA’s investigation,” board chairman Tom Bowen said. “We’re hoping that once we get past some of our current issues, we will be able to cut our expenses.”

The "current issues" include the indictments of former Superintendent Crawford Lewis and former chief operating officer Patricia Reid, who are charged with running a criminal enterprise within the school system. Sutherland Asbill & Brennan, the district's general counsel, increased its rates to represent the district in the ongoing case.

Almost half of DeKalb’s legal payments – $2.48 million – went to King & Spalding, which is representing the district in its suit against construction manager Heery International. The district is no longer paying legal costs to King & Spalding, but still must pay for expert witnesses to review the construction documents, Bowen said.

DeKalb schools, the state's third-largest district, filed the suit against Heery, claiming the construction management firm mismanaged funds from the school system's special local option sales tax.

"We're pushing for the earliest possible trial date since our case is document-driven. The facts will speak for themselves," Bowen said. "The maximum damages we claimed are in excess of $100 million."

No court date has been set. King & Spalding attorney John Hinchey, who is handling the district's case, did not return phone calls or an email.

While $100 million would be a big win for the district, parents are concerned about the board’s spending.

“I think if DeKalb could get its house in order in every way, it would find its legal expenses going down,” said Lynn Deutsch, a Dunwoody mother of three. “It’s just another sign of dysfunction in DeKalb. That money could pay for a lot of teachers and smaller classes.”

The board slashed $104 million from this fiscal year’s budget, including 289 jobs of paraprofessionals, school resource officers, media clerks and other employees. The board also increased class sizes, cut teachers’ retirement contributions and mandated furlough days.

The legal budget – both last year and this year – is $934,816, according to chief financial officer Marcus Turk. For this year, however, the system signed contracts for nearly $400,000 more than the budgeted figure; school board members were not aware of the discrepancy.

That’s supposed to cover two law firms, Sutherland and Alexander & Associates, which handles human-resources matters. The board decided to retain the lawyers for set fees, hoping to eliminate sending work to other lawyers and cut costs.

“At this point we’re in better shape than we’ve ever been because our legal people are getting a flat rate,” board member Jim Redovian said. “We’ve saved almost half since we redid the negotiations last year. We did real well because, before, we were being billed by the hour.”

Records show the district paid those firms a total of $2.78 million. The rest went to other firms to pay for assistance with lawsuits and other business.

The lawyers’ nine-month contracts expired June 30, but the district has not issued another request for proposals or publicly discussed a new contract.

Instead, the board has opted to continue business with the two companies on a month-to-month basis. They are paying Sutherland $120,555 a month and Alexander $68,333 a month, Turk said.

“The DeKalb County School System has not renewed its contract with Sutherland or Alexander & Associates, but will review for a decision for the 2010-2011 school year in the very near future,” district Chief of Staff Alice Thompson said in a statement. “In the meantime, the purchasing policy allows the district to extend the services month to month.”

Bowen said the board hasn’t had time to discuss the contracts but hopes to do so in the next few weeks.

However, the district has already received at least one competitive bid from another firm, offering to do all of the legal work at a lower cost. Marietta firm BrockClay, which represents several other metro school systems, wrote a letter to the district in May offering to do all legal work for a year for $1.65 million, including a search for a superintendent.

The board has not responded to BrockClay and also has taken no action in hiring a search firm.

Records show BrockClay bid $1.09 million last year for nine months of legal services. However, the board voted to go with a firm with more diversity, according to board members.

Glenn Brock of BrockClay declined to comment, other than saying he is not in negotiations with DeKalb schools.

Fulton, Cobb and Clayton also contract with BrockClay, according to records obtained from the districts.

DeKalb school board vice chairwoman Zepora Roberts said she thinks the board turns to lawyers too often.

“I have a concern about where we give everything to the lawyers," she said. "When we have a policy that needs to be upgraded, we just give it to the attorneys to make changes. In essence, I think we as a board are relegating our responsibilities over to lawyers. If you give a lawyer something, they are going to do it. They are in the business of making money.”

Despite her concerns, Roberts praised Sutherland, saying the firm has cut costs since the district hired it and stopping paying hourly fees.

School legal costs from July 1, 2009 -- June 30, 2010

DeKalb: $5.79 million

Atlanta: $2.7 million *

Gwinnett: $1.89 million **

Fulton: $1.86 million

Cobb: $1.74 million

Clayton: $579,278

* About $1.5 million to in-house lawyers; the balance to outside firms.

** Does not include five other attorneys contracted.

Source: Area school districts