Hourly Fees Paid by Various Federal Agencies to Private Attorneys
for Legal Services (03-JUL-01, GAO-01-887R).			 
								 
This report provides information on hourly fees paid by the	 
federal government to private attorneys for legal services in	 
fiscal years 1999, 2000, and 2001. Relevant legal services	 
include federal employee defense, litigative consultation,	 
intellectual property consultation, and asset forfeiture-related 
services. For these types of services, GAO obtained information  
regarding hourly fees paid to private attorneys by the Department
of Justice, the Administrative Office of the United States	 
Courts, the National Aeronautics and Space Administration, and	 
the Department of Veterans Affairs. GAO found that the hourly	 
fees paid to private attorneys ranged from $125 to $357,	 
depending on the agency and the type of legal service.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-887R					        
    ACCNO:   A01511						        
  TITLE:     Hourly Fees Paid by Various Federal Agencies to Private  
             Attorneys for Legal Services                                     
     DATE:   07/03/2001 
  SUBJECT:   Legal fees 					 
	     Lawyers						 

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GAO-01-887R
     
GAO- 01- 887R Fees Paid to Private Attorneys

United States General Accounting Office Washington, DC 20548

July 3, 2001 The Honorable William D. Delahunt House of Representatives

Subject: Hourly Fees Paid by Various Federal Agencies to Private Attorneys
for Legal Services

Dear Mr. Delahunt: This report responds to your request that we provide you
with information on hourly fees paid by the federal government to private
attorneys for legal services in fiscal years 1999, 2000, and 2001. Relevant
legal services include federal employee defense, litigative consultation,
intellectual property consultation, and asset forfeiture- related services.
For these types of legal services, we obtained information regarding hourly
fees paid to private attorneys by the Department of Justice (DOJ), the
Administrative Office of the United States Courts (AOUSC), the National
Aeronautics and Space Administration (NASA), and the Department of Veterans
Affairs (VA). Generally, we focused on these agencies based on our 1992
report on private attorneys. 1

Scope and Methodology

We found no centrally available source identifying all federal agencies?
contracts with or uses of private attorneys. Thus, we focused our work on
four federal agencies- DOJ, AOUSC, NASA, and VA. In selecting these
agencies, we first reviewed our 1992 report, which was based on an extensive
survey of federal agencies in the executive, legislative, and judicial
branches. In total, that report identified 59 agencies 2 that reported
awarding 4,567 contracts for legal services during fiscal year 1991. For
that year, the seven agencies with the most contracts accounted for 4, 129
(90 percent) of the total- Resolution Trust Corporation (1,782), Federal
Deposit Insurance Corporation (1,392), Department of Defense (382), VA
(203), U. S. Department of Agriculture (176), NASA (99), and DOJ (95).

1 Private Attorneys: Information on the Federal Government?s Use of Private
Attorneys (GAO/ GGD- 93- 17FS, Oct. 20, 1992). 2 Six of the 59 agencies
awarded no contracts in fiscal year 1991 but made payments in that year
based on contracts awarded in previous years or other arrangements.

GAO- 01- 887R Fees Paid to Private Attorneys Page 2 As indicated, this
current report presents information we obtained from three (DOJ,

NASA, and VA) of the seven agencies, and we also contacted AOUSC to provide
a judicial branch perspective. Regarding the other four agencies not covered
in this report:

 The Resolution Trust Corporation was terminated on December 31, 1995.

 The Federal Deposit Insurance Corporation?s substantial number of
contracts in 1991 occurred during a nationwide financial crisis; we did not
obtain updated contract information for this report.

 We contacted the Department of Defense but were unable to obtain
information in time for this report.

 In response to our inquiries at the Department of Agriculture, officials
reported that private attorneys were used for legal services involving, for
example, foreclosures on farms and rural development projects. The officials
noted, however, that these private attorneys were paid on a ?per job? basis
rather than hourly rates.

Regarding the fee data for federal employee defense presented in this
report, we reviewed the federal regulation and DOJ?s and AOUSC?s guidance
applicable to the fee schedule for this type of legal service. Fees for the
other types of legal services- litigative consultation, intellectual
property consultation, and asset forfeiture- related services- were based on
federal procurement procedures rather than regulated fee schedules. For
these legal services, we discussed the fees with knowledgeable agency
officials to ensure an understanding that the information provided to us was
to be based on actual payments by the respective agency.

Results

For fiscal years 1999 through 2001, the enclosed table provides data on
hourly fees paid to private attorneys by various DOJ components (i. e., the
Antitrust Division, the Civil Division, the Tax Division, and the U. S.
Marshals Service), AOUSC, NASA, and VA for legal services that we grouped
into four categories- federal employee defense, litigative consultation,
intellectual property consultation, and asset forfeiture- related services.
In fiscal year 2001, for example, the average hourly fees paid to private
attorneys ranged from $125 to $357, depending on the agency and the type of
legal service. Specific information about the fees is as follows:

 Federal employee defense. By regulation (28 C. F. R. sect. 50.16), DOJ?s Civil
Division is responsible for setting fee schedules for representation of
federal employees by private counsel at federal expense. According to AOUSC,
the judiciary adopts (both by regulation and practice) DOJ?s maximum rate as
its own maximum rate for retaining legal counsel to represent judicial
officers and employees who have been sued in civil litigation, where DOJ is
unable to provide representation. The maximum hourly fee of $125 was
established in 1998 for attorneys with more than 5 years of practicing
experience. Attorneys with 3 to 5 years of experience can be paid an hourly
fee of $100, and less experienced attorneys can be paid $83 hourly. In
response to our inquiry, DOJ and AOUSC officials said that the rate of $125
an hour was paid in all or almost all cases (see note b in the enclosed
table).

GAO- 01- 887R Fees Paid to Private Attorneys Page 3

 Litigative consultation. At times, DOJ?s Antitrust, Civil, and Tax
Divisions hire private attorneys for their expertise and assistance in
analyzing specific legal issues or cases. For fiscal year 2001 (as of April
2001), for example, the Antitrust Division reported having three contracts
with private attorneys and paying an average hourly fee of $225 for legal
services, primarily to help trial teams prepare complex antitrust cases for
litigation. In fiscal year 2000, the Antitrust Division had 17 contracts and
paid an average hourly fee of $271. Also, in fiscal year 2000, the Civil
Division had five contracts with private attorneys (and paid an average
hourly fee of $229) for legal services that included consultation on
international law cases and analysis of foreign court documents. In that
same year, the Tax Division had one contract (and paid an average hourly fee
of $188) for assistance in responding to a taxpayer?s motion to recover $24
million collected by the federal government, plus interest.

 Intellectual property consultation. In fiscal year 2001, NASA (one
contract as of April 2001) and VA (one contract as of June 2001) hired
private attorneys for advice and assistance in protecting the federal
government?s intellectual property rights. Under NASA?s contract, a private
law firm was paid an effective hourly fee of $210 to prepare a patent
application. The law firm was expected to help obtain the greatest possible
value in property rights for the government and to provide a defense if
subsequent litigation develops. Additionally, NASA reported that it used
private attorneys for patent prosecution work, but that these contracts were
firm, fixed price and did not contain any hourly rates. Under its contract,
VA paid an average hourly fee of $308 to two private attorneys, who provided
advice on the government?s legal rights in certain software products and on
the potential liability under various trade secret laws.

 Asset forfeiture- related services. The U. S. Marshals Service uses
private attorneys for legal expertise in all phases of forfeiture, pre-
seizure, and disposal, including assistance in drafting court orders. For
instance, in fiscal year 2000, the Marshals Service had two contracts with
private attorneys (and paid an average hourly fee of $305) for legal
services involving pre- seizure planning, operational issues, and disposal
of forfeited assets. For fiscal year 2001 (as of May 2001), the Marshals
Service reported having three contracts with private attorneys and paying an
average hourly fee of $357.

Agency Comments

We provided a draft of this report for comment to DOJ, AOUSC, NASA, and VA.
During the period June 25- 28, 2001, we received written or oral comments
from all of these agencies. DOJ, AOUSC, and NASA generally agreed with the
substance of the draft and provided technical clarifications, which we
incorporated in this report where appropriate. VA expressed agreement with
the substance of the draft.

-- -- -- -- - As agreed with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report until 30
days after its date. At that time, we will provide copies to the Attorney
General, the Director of AOUSC, the Administrator of NASA, and the Secretary
of Veterans Affairs. We will also make copies available to others on
request.

GAO- 01- 887R Fees Paid to Private Attorneys Page 4 If you have any
questions about this report, please contact me at (202) 512- 8777 or
Assistant

Director, Danny R. Burton, at (214) 777- 5600. Other key contributors to
this report were Fredrick D. Berry, Shirley A. Jones, Mary K. Muse, and
Linda K. Willard.

Sincerely yours, Paul L. Jones Director, Justice Issues

Enclosure

GAO- 01- 887R Fees Paid to Private Attorneys Page 5 Enclosure

Hourly Fees Paid to Private Attorneys for Legal Services Fiscal Years 1999
Through 2001

Legal service and agency Fiscal year a Number of

contracts Average

hourly fee paid Federal employee defense b

DOJ Civil Division c 1999 48 $125 2000 61 $125 2001 20 $125

AOUSC 1999 19 $125 2000 13 $125 2001 9 $125

Litigative consultation

DOJ Antitrust Division 1999 11 $231 2000 17 $271 2001 3 $225

DOJ Civil Division d 1999 4 $200 2000 5 $229

DOJ Tax Division e 2000 1 $188

Intellectual property consultation

NASA f 2000 1 $250 2001 1 $210

VA g 2001 1 $308

Asset forfeiture- related services:

U. S. Marshals Service 1999 2 $250 2000 2 $305 2001 3 $357 a Agency data for
fiscal year 2001 are as of various dates in April, May, or June 2001.

b Regarding federal employee defense, the amount of $125 per hour is not an
arithmetic calculation or average. Rather, $125 per hour is established by
regulation as the maximum amount payable. More specifically, attorneys with
more than 5 years of practicing experience can be paid $125 hourly;
attorneys with 3 to 5 years of experience are to be limited to $100 hourly;
and less experienced attorneys are to be limited to $83 hourly. In response
to our inquiry, DOJ officials said that the agency uses experienced private
attorneys, who charge the maximum ($ 125 hourly). Similarly, AOUSC officials
said that, in almost all cases where private counsel is retained, the
maximum rate ($ 125 hourly) is paid.

c The number of contracts shown for DOJ?s Civil Division represent contracts
with private attorneys for the defense of employees at various federal
agencies. d According to a DOJ official, the Civil Division had no contracts
for 2001.

e According to a DOJ official, the Tax Division had no contracts for 1999
and 2001. For 2000, the one contract involved legal services performed by
one private attorney, whose actual fee was $188 per hour. f According to a
NASA official, the agency had no contracts for 1999. The one contract in
2000 and the one contract in 2001 involved legal services performed by two
different law firms, whose hourly fees were $250 and $210, respectively. g
According to a VA official, the agency had no contracts for 1999 and 2000.
For 2001, the one contract involved legal services performed by two private
attorneys, whose fees averaged $308 per hour. Source: GAO summary of data
provided by federal agencies.

(440043)
*** End of document. ***