Hiring an in-house attorney for the Omaha Public Schools might not deliver immediate savings and could even increase legal costs in the future, the district's lead attorney cautioned this week.
Over the past year and a tumultuous election cycle, several OPS board members and administrators zeroed in on the district's legal expenses, arguing that it needed to wean itself off outside legal advice that has led to big bills in the past.
On Monday, the board hired Megan Neiles-Brasch as its in-house attorney and chief negotiator for $132,000 per year. She will assume many of the district's day-to-day legal and labor relations responsibilities.
OPS had relied entirely on outside legal advice for the past 40 years, and the move to a staff attorney had been supported by school board members and former interim Superintendent Virginia Moon as a way to shift more legal work in-house save money.
But now some question what, if any, savings OPS will see.
David Kramer, the board's current lead attorney from Baird Holm, said legal expenses could actually increase.
“In many cases with inside counsel, our workload doesn't decrease,” Kramer said. “You're going to find more things that need review from in-house counsel. That's how Denver started, and now they're at seven in-house attorneys and they still have outside counsel.”
Earlier Monday at a legislative hearing, school board President Justin Wayne had touted the new position as a way to reduce costs. But at Monday night's board meeting, he and Superintendent Mark Evans said any savings is difficult to predict.
That left board member Marian Fey with one question: Where are the promised savings?
“I'm still trying to see where the reduction is going to come in,” she said at Monday's meeting.
“I felt like there was a little bit of a bait and switch going on,” she said Tuesday.
OPS has paid Baird Holm more than $13 million over the past five years to handle all its legal work, though annual expenses have dropped in recent years because of a new retainer agreement and the absence of big-ticket lawsuits.
Evans and Wayne said Tuesday that they both believe bringing more of OPS's legal work in-house will save money in the long run. But they cautioned that the appointment of Neiles-Brasch was not meant to dramatically decrease legal spending immediately.
“There's this image that there's going to be a million-dollar savings,” Wayne said. “Will we save $500,000 from hiring one person? I don't know. Nobody knows that.”
Kramer, too, warned the board against placing too much pressure on its new attorney to cut costs.
“I hope Megan is not judged by how much she saves or doesn't save,” he said.
Fey continued to press the point Tuesday, saying the district routinely set longer-term benchmarks in areas such as student achievement. Why not assign similar goals to rein in legal spending? she asked.
Neiles-Brasch, a 38-year-old attorney formerly with the Nebraska Association of School Boards and Nebraska Commission of Industrial Relations, takes over the role of negotiator from Gerry Huber, the district's executive director for general administration who retired earlier this year.
In addition to crafting labor contracts and negotiating with collective bargaining units, Neiles-Brasch will also be asked to handle routine legal work, from sitting in on school board meetings to reviewing real estate deals. She starts Oct. 23.
Previously, legal work was handled by Baird Holm and billed on an hourly basis, until the board approved an $11,500 monthly retainer in December meant to cap most legal fees.
Kramer said Baird Holm billed the district $1.42 million for the 2012-13 school year, down from $1.9 million the year before. Forty-three attorneys and eight paralegals spent a total of 5,914 hours working on 207 different legal matters for OPS, though most work fell under the new retainer.
“I believe we are providing very effective, very efficient services to the school district, and this is what the numbers for 2012-2013 demonstrate,” Kramer said.
The board is still weighing whether to renew Baird Holm's contract when it expires or seek bids from other law firms for OPS's outside legal work. Wayne, who previously championed rebidding the contract, said he's now leaning toward issuing a less formal “request for qualifications” to see what other firms charge for legal services.
Fey said Monday that she thought the plan all along was to rebid the services and that she did not want to see a Baird Holm contract extension quietly approved after Wayne and much of the board campaigned to overhaul legal spending.
“It was a huge part of the election, huge, and now that we have in-house counsel and you're no longer dissatisfied with Baird Holm, I don't want to see it get swept under the rug,” she said.
Wayne said nothing has changed since the election. Once Neiles-Brasch begins to dig into the district's operations, she can compile a more detailed analysis of legal fees and advise the board on how to proceed with its external contracts. She also can't be called on to predict the future — one drawn-out lawsuit could send legal bills spiking again if OPS needed to bring in specialized attorneys.
“We have in-house counsel, so let's let that person figure out what's going on and then report back to the board,” Wayne said. “Here's the areas we can save, the areas we can improve so we don't rely on outside counsel. We're still moving ahead.”