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 agencies2

 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.
Page 2 GAO-01-887R Fees Paid to Private Attorneys

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

• 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.
Page 4 GAO-01-887R Fees Paid to Private Attorneys

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

Enclosure

Hourly Fees Paid to Private Attorneys for Legal Services

Fiscal Years 1999 Through 2001

Legal service and agency Fiscal

yeara

Number of

contracts

Average

hourly fee

paid

Federal employee defenseb

DOJ Civil Divisionc 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 Divisiond 1999 4 $200

2000 5 $229

 DOJ Tax Divisione 2000 1 $188

Intellectual property consultation

NASAf 2000 1 $250

2001 1 $210

VAg2001 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.

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