City workshop explores in-house legal counsel

City Attorney Robert Batsel Jr. speaks during an Ocala City Council meeting at Ocala City Hall in Ocala, Fla. on Tuesday, Dec. 15, 2020. [Bruce Ackerman/Ocala Gazette] 2020.

Ocala City Council members had one question on their minds during a recent workshop – should the city continue to outsource its legal services to a private firm or create its own legal department to handle in-house legal services.

The Jan. 25 workshop was scheduled following the announcement by the firm of Gilligan, Gooding, Batsel, Anderson & Phelan, PA, which has represented the city for 30 years, that it would discontinue its services to the city at the end of its contract in October.

City attorney, Robert Batsel Jr. previously told the Gazette that he, along with Jimmy Gooding and Rob Batsel Sr., would split financially from the firm and focus on their real estate land-use practice- yet remain in the same office space with the original firm.

During the workshop, it was not clearly stated, but was implied that some of the lawyers remaining with the original firm, including Patrick Gilligan, were willing to continue to represent the city.

The meeting included an analysis by Ocala City Manager Sandra Wilson on the pros and cons of in-house vs. outsourced legal services, and included a summary of numerous complaints, identified by city department heads, with Gilligan, Gooding, Batsel, Anderson & Phelan.

The Gazette, through a public records request, obtained the written statements that created a basis for Wilson’s, less-than-glowing summary.

The complaints included long waits for document and contract reviews, and unanswered emails and or return phone calls, which the department heads said hurt their efficiency.

The Ocala Electric Utility Department said in its memo, “several of these issues go back many months and years without being updated or resolved. There really needs to be some method of getting updates from the City Attorney office on status of open requests (at least monthly), so we know where each request is in the que.”

Meanwhile, Christopher J. Watts, the Director of Human Resources & Risk Management said in his statement: “I would like to see the relationship between Risk and the City Attorney become directional where the City decides the most economical and efficient way to proceed with a case, including early settlement in some cases.

“The city attorney’s office would then carry out the city’s instructions in a manner that is most economically sound from the city’s perspective,” he said.

Watts complained cases were going to mediation “without first completing depositions” or other legal discovery mechanisms such as written interrogatories or requesting documents from the other side and was not aggressive in settling claims.

“There is no incentive for the city attorney’s office to settle claims as taking claims to court increases their revenue,” said Watts.

The risk management department had the most to say when it came how the firm handled litigation, complaining that there was very little communication regarding the status of cases, and that the attorneys did not seek city input in their litigation strategy.

Another email memo that seemed to originate from the Risk department stated, “Sometimes I believe the city attorney is too aggressive defending actions and ordinances which has been involved drafting. It would be easy to allege a conflict in cases like this, and the public likely feels that way.”

Also included in the complaints were concerns of “questionable billing practices” related to the way attorney conferences were billed, as well as work like scheduling or review of medical records that could be performed by a paralegal instead of a lawyer.

Concerns about conflicts of interest were also raised by city staff in the City Manager’s report. Previously it was reported that the firm inserted a conflict-of-interest clause in their current contract that was not in prior contracts.

The conflict-of-interest clause, which was not discussed with the council or city manager when the contract was signed and only recently became public, said the city attorney had advised the city, and the city is aware that the firm also represents “private persons and entities” that include “developers or contractors” who “have relationships with, or seek approvals from, [the] city.”

In the case of city council deciding to bring legal services in-house, Wilson thought that the council could initially budget for a five-person team legal department at the cost of $950,000 a year. Gilligan, Gooding, Batsel, Anderson & Phelan’s billing for 2018-2019 totaled $1,084,638.81; $897,757.95 in 2019-2020 and $918,752.94 in 2020-2021.

Council member Jay Musleh asked Wilson to confirm that if legal services were moved in-house the city would likely not anticipate it being a cost saving measure. Wilson then said there would likely be no cost savings for legal services, but likely an increase in efficiencies.

Councilman James Hilty said that while efficiencies were always a concern, reducing the conflict of interests may be the answer to also increasing efficiencies because the city would not have to split their attorney’s time with other clients.

Councilman Barry Mansfield said, “Just plainly speaking, if I have an attorney representing me and then I have the same firm representing my subcontractors and they are writing contracts for both of us- I need to find another attorney.”

Mansfield also said development has increased, and he expected legal services to navigate the development issue would also increase. Mansfield felt that having those services on hand for quick turn around would be more efficient.

Musleh expressed concern during the meeting that by not staying with the firm, the city would be losing “institutional knowledge” if the city did not stay with the private firm.

Batsel, Jr. listened to the council express their opinions on whether to move legal services in-house or for the city to stay with an outside private firm and said that while he completely understood the concerns, he was committed to help the transition and recommended the council and Wilson seek out the advice of county attorney, Guy Minter.

Batsel indicated that the city might consider restructuring the insurance policy to utilize insurance defense attorneys but warned that it could result in the city having less control over litigation and possibly increase premium costs.

Watts explained to the council that the insurance company starts paying the defense for city litigation once it passes $75,000. Historically the city has had an agreement with the insurance company that the city makes up the difference between the rate insurance company reimbursed attorney’s fees and what the city’s private firm charged at so that litigation could remain with the private firm representing the city.

Batsel told the council in closing that if the council wanted to stay with an outside private firm it needed to understand that even an outside private firm completely dedicated to the city would still have conflicts of interest to navigate due to prior client base.

Wilson said that the council would need to start the search for the city attorney as soon as possible since once that attorney was hired, he or she would need to make decisions on how to staff their department.

Council agreed to set this matter for city council meeting a month out so that they individually had time to explore the cost of bringing legal services in-house.