L.A. Pays Off Most Legal Bills in 2 Holden Suits

Los Angeles city officials have paid nearly all of the $1.5-million tab from lawyers who successfully defended City Councilman Nate Holden against two sexual harassment lawsuits--despite an outside audit that suggested withholding $560,000.

City Administrative Officer Keith Comrie agreed to pay all but $200,000 in fees to two local law firms after mediation by a pair of retired judges jointly selected by the lawyers and the city.

The taxpayers’ final bill for the councilman’s legal woes, then, is 12.6% less than the attorneys requested, but 37% more than the $978,207.98 that the auditor found justified, according to documents obtained by The Times.

The audit itself, conducted by Jerry Knapton of Coopers, Kasparas and Scharf, cost the city an additional $55,000.

“It was cost-effective to have the audit, obviously,” Holden said Friday. Regarding the total tab, he added: “It was worth the money, because if we didn’t fight it, it would be a hell of a lot more.”

Spurred by controversy over the high price of Holden’s defense--including a Times analysis in which a panel of auditing experts said the law firms took advantage of the city’s lax cost controls to overbill taxpayers--the City Council decided last year not only to audit Holden’s bills, but also to spend another $50,000 training city staff to analyze future invoices from private attorneys.

“We’ve already saved money,” said Georgia Mattera of the city administrative office, who monitors voluminous stacks of bills submitted by the legions of lawyers with city contracts, most due to conflicts of interest for the city’s in-house counsel. “It may not end up saving us millions, but at least there are some cost controls.”

Records show that Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro--the Century City firm that won one suit filed against Holden and several of his aides after a six-week 1995 trial, and got the second case dismissed on summary judgment--was paid a total of $859,402.75. The downtown firm of Casterline & Agajanian, which originally represented Holden but was fired before trial, was paid $485,310.69.

Casterline was able to fight most of the auditor’s recommendations because it had been paid the bulk of the money billed before Knapton began reviewing the bills.

At the time of the audit, the city had paid the firm $460,310.69. Knapton’s report suggested that Casterline only deserved $360,961.81 and should pay the city back nearly $100,000, while the lawyers demanded an additional $95,040.65, plus interest. Retired Superior Court Judge Maurice Hogan brokered an agreement in which the city paid the firm an additional $25,000.

“Realistically, it’s hard to see us getting money back,” acknowledged Mattera. “If you pay for something, you’re hardly ever going to get it back.”

Since the Holden audit, Mattera said, the city has forced lawyers to sign an agreement in which the city reserves the right to review all bills, even after payment, at the end of a case.

Despite getting more than $100,000 above what the auditor recommended, attorney Tim Agajanian said he thought the process was unfair.

“It was result-driven,” he said, adding that he would like to do more work for the city. “I do not hold in great esteem and regard the legal auditing process if it’s done after the fact. . . . It’s not fair, and the results, therefore, I feel, are not as credible and reliable.”

Christensen, Miller also won the bulk of the disputed amounts.

The city’s audit called for the firm to return about $80,000 it had already received, while the lawyers demanded more than $300,000 in unpaid bills. After a day of mediation, retired Superior Court Judge Robert Weil ordered the city to pay $180,000 on top of the $679,402.75 it had already given the firm.

“The law firm did an outstanding job by obtaining either judgments or settlements,” Weil wrote.

“The use of the ‘audit’ is open to question,” he added. “Auditing is not an exact science, even when it deals with nothing more than figures on a balance sheet. It becomes increasingly non-exact when it seeks to analyze entries on attorneys’ bills.”

Using a computer program to analyze both firms’ bills in detail, Knapton found that the lawyers often failed to fully explain how they spent their time, sometimes double-staffed meetings, frequently charged the city for overhead costs such as clerical work and jacked up prices for photocopies and faxes beyond what courts have ruled is acceptable.

In addition, Knapton complained that Christensen attorneys twice billed for unusually long days--23.75 hours in one case, 21 hours in another--and that the firm’s David Lake billed at a lawyer’s rate even before he was admitted to the bar.

Perhaps most problematic, Knapton said, was the firms’ use of 1’block-billing,” in which multiple tasks are clustered together in one entry.

“It is of course possible that all of this time is entirely appropriate. However . . . it is impossible for anyone to know how much time was really devoted to each task, and this makes it difficult to analyze the work and the bill for reasonableness,” Knapton wrote in the Christensen report. “Accountability by the law firm is substantially impaired by this practice.”

Judge Weil did not explain how he arrived at the $180,000 settlement figure, or which charges he found unacceptable.

Documents show that several items highlighted in The Times’ analysis of the bills were also flagged in the city’s audit, and ultimately conceded by the attorneys.

The Christensen firm, for example, switched to billing in 0.1 hour increments, rather than 0.25 hour, after The Times’ story, which showed that 0.1 hour chunks had become standard in the field. In addition, the firm dropped a $3,139.66 charge for after-hours air conditioning that received much criticism from City Hall after being reported by The Times.

Skip Miller, Holden’s lead attorney for the trial, said in February that the firm bills clients for air conditioning when it’s “absolutely necessary to work after hours,” explaining: “The building shuts the air off [at 6 p.m.]. The windows are sealed. We obviously have to be able to breathe fresh air.”

But Friday, Miller said he was glad to remove the charge, adding that it had been an “oversight.”

“I let that go through, I hadn’t even realized it. I was working 16 hours, 18 hours, around the clock,” he said. “We don’t bill the city for that.”

Overall, Miller said he was pleased with the outcome of the audit.

“We prevailed in these lawsuits. We won everything, and saved the taxpayers of the city millions of dollars,” he said. “It’s a happy ending to all the litigation. Frankly, we made a lot of money. We worked very hard for it.”