A revamping of the Philadelphia School District's law department has allowed the district to cut payments to outside attorneys in half for the first six months of this fiscal year.
Since July 1, the district has spent $739,806 on law firms, compared with $1.5 million for the first six months of the prior year.
The reorganization also could help the district avoid the kinds of costly legal battles that earned a rebuke from a federal judge.
Judge Mitchell S. Goldberg recently lambasted the district for an "overly aggressive" defense in lawsuits over a no-bid camera contract that have cost taxpayers nearly $7 million, including $2 million in outside legal fees.
Following recommendations of a veteran legal consultant, the district has hired more in-house attorneys to handle cases, reduced rates for outside counsel, and adopted standards for evaluating cases that include their potential for success.
That review system may have been a factor in the School Reform Commission's recent decision to settle one of the remaining camera cases.
Instead of going to trial in federal court, the SRC last month voted to pay John Byars, a former procurement official, $425,000 to end claims that he had been defamed, wrongfully terminated, and made a scapegoat amid the fallout from the camera contract.
Miles H. Shore, the district's interim general counsel, said he could not comment on the Byars settlement.
But he said the district's new approach calls for "a more consistent and principled review of cases and deciding which ones should be settled and at what level."
SRC member Bill Green said of the Byars case: "We felt like it made sense to settle vs. continuing to litigate. . . . We know how the other cases went."
The goal of reorganizing the law department is having more cases handled by in-house attorneys, improving effectiveness, and saving money, including on bills for outside lawyers, which had been rising every year.
But for the fiscal year that ended June 30, the district spent $6 million of the $6.6 million budgeted for outside attorneys. Shore said it was the first time in six years the department spent less than budgeted.
The first six months of this year indicate the savings trend will continue.
"I feel we have reduced the reliance on outside counsel considerably," Shore said.
The changes were not prompted by the camera cases, but those bills were a factor in the district's rising legal expenses.
In all, four suits were filed against the district after the Inquirer reported in November 2010 that Superintendent Arlene C. Ackerman had pushed aside a Bucks County company that had begun preliminary work on a $7.5 million emergency contract to install surveillance cameras, and directed that the contract be awarded to a small, minority-owned firm instead.
Ackerman left the district in August 2011 and died in February 2013.
The Byars settlement marked a change from the vigorous defense the district mounted in two previous camera cases it lost in federal court.
Last June, federal jurors found that the district and Ackerman had discriminated against the Bucks firm and awarded it $2.3 million in damages. A federal judge ordered the district to pay an additional $1.3 million for the firm's attorney fees, costs, and interest on the damages.
A year earlier, a federal jury found that Ackerman and another former official had violated the rights of a former administrator by putting him on leave during an investigation into leaks about the contract and recommending that the SRC fire him. The SRC agreed to pay $725,000 to settles claims and cover part of his lost wages and legal bills.
Neither Green nor the other current SRC members were on the commission when the suits were filed, but he said the SRC had learned from the experience.
"I think we can take a lesson from that," he said.
Now, Green said, the SRC gets regular updates on cases, including "what it has cost so far. That was certainly brought to light in these [camera] cases."
Green said he had been concerned about the district's mounting bills for outside attorneys - especially for the large number of special-education cases - since he joined the SRC in 2014.
The law department reorganization got a boost last year when the SRC awarded a one-year consulting contract of $240,000 to Abby Pozefsky, a legal turnaround specialist. Since March, Pozefsky has been studying the operations of the law department, analyzing staffing and practices, and reviewing payments and fees.
Pozefsky, who had conducted similar studies for the city and the Philadelphia Gas Works, was tasked with analyzing the performance of staffers and outside attorneys and making recommendations to improve the department's effectiveness and save money.
Her suggestions have included hiring more lawyers and support staff to bring the office back to the complement of 20 lawyers it had before major cutbacks were made in 2011 when the Ackerman administration was grappling with a $629 million budget shortfall.
The law department laid off 13 staffers, including six lawyers and two paralegals, as part of cutbacks at district headquarters.
After the layoffs, Shore said, the district had to turn to more costly outside attorneys to handle lawsuits, as well as the claims brought by parents who said their children were not receiving special-education services they needed.
The department now tries to handle most cases with staff attorneys, and Shore said the savings more than cover their salaries and benefits.
Kevin Geary, a district spokesman, said having stronger in-house counsel also means they can work more closely and proactively with district staff to resolve disputes before they become lawsuits.
The law department also set standards for evaluating all suits, including examining their short-term and long-term costs and prospects for success.
The district had been paying outside lawyers at reduced rates, but Pozefsky thought it could do better than a rate of $325 per hour for both senior and less experienced lawyers.
The district switched to the same hourly rates as the city and PGW. Since October, the district has been paying outside lawyers $155 to $225 per hour, depending on experience.
And when the department retains an outside firm, a staff attorney is assigned to monitor and oversee the case and review the bills.
"That is a regular, ongoing process," Shore said. "We are doing a better job at that."