City Caught Napping on Closure of City Attorney’s Law Firm

steinerHow did the city of Davis find out about the impending closure of City Attorney Harriet Steiner’s law firm, McDonough, Holland and Allen?  Apparently they found out when they read about it in the Vanguard.

That is how City Councilmember Sue Greenwald found out. None of the other councilmembers or the city manager appear to have known beforehand, either, despite the fact that this was a rather well-known possibility for several months, at least in Sacramento circles.  As we reported last week, the law firm has been losing high-profile partners and attorneys for the past four months.

Just after Labor Day they will close their doors, and Sue Greenwald is concerned that the city has not moved quickly enough for the council to be able to take appropriate action.

Part of the problem here may be that many do not see this as a huge problem that necessitates action. Harriet Steiner told the Vanguard on Friday that she does not anticipate that the changes will impact the services to the city.  She wrote in an email, “I cannot comment at this time except to say that my work for the city should not be affected. In addition the other lawyers in my firm are also committed to assuring that any changes at my firm do not impact the services to the City.”

We have since learned that Ms. Steiner, who is currently on vacation, intends to start her own firm that could represent the city.  However, as Councilmember Greenwald points out, there are two potential problems with that approach.  First, the city council has direct hiring authority of two positions in the city.  One is the city manager and the other is the city attorney.  Thus the council ,and not the city manager, makes the determination as to whether to retain Ms. Steiner as City Attorney.

The second point is that the city has a contract with McDonough, Holland, and Allen, not with Ms. Steiner directly.  It is possible, even likely, that they would want to continue with her services.  However, should they not at least explore their options?

Harriet Steiner and her law firm have represented the city of Davis since 1986.  In that time, the city has never looked into competitive bidding situations, despite the fact that they pay out over $300,000 and sometimes nearly $400,000 per year in legal services.

Timing is a problem.  It would seem to make sense for the new council, which is set to be seated on July 13, 2010, to make the determination as to what to do.  However, following the July 13 meeting, the council has a little over two weeks before it goes on its August hiatus and then immediately after Labor Day, the city would be faced with a new situation involving their city attorney.

One possibility would be to swear-in the new council following the July 6th meeting, rather than on July 13th.  That would not change anything in terms of meetings, but it would allow the new council to meet for an additional week in closed session to decide what course of action they ought to take.

There is another possibility, and  that would be to retain Ms. Steiner on an interim basis once her firm dissolves, and then decide in September what to do on a more permanent basis.

From the Vanguard’s perspective two things are striking.  First, the fact that the city and city council were caught completely off-guard by this.  We had assumed last week that the city was well-aware of Ms. Steiner’s firm’s situation.  That appears not to be the case.  Neither Mayor Pro Tem Saylor nor City Manager Bill Emlen responded on Friday to Vanguard’s attempts to get a comment – that is apparently because they were on vacation.

Second, there was the automatic assumption by the City Manager that the city would continue to utilize Ms. Steiner’s services regardless of her firm’s situation.  However, the fact that the city utilizes the firm’s services gives them access to a wide range of attorneys and, in fact, experts in various fields.  That situation would drastically change if Ms. Steiner creates her own smaller firm.

It seems possible, even likely, that the city would opt for the institutional memory. The general belief seems to be that Ms. Steiner represents the city well and generally prevails when litigation occurs.  Nevertheless, that decision is for the council to make – the new council – not the city manager or city staff.

This seems to be another example of how this city operates and what most people hope will change once a new council is seated.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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22 Comments

  1. Phil Coleman

    “. . . there was the automatic assumption by the City Manager that the city would continue to utilize Ms. Steiner’s services regardless of her firm’s situation.”

    How could have the City Manager made this automatic assumption? According to this report, he was unaware of the change. If he did not know, he could not assume.

  2. Dr. Wu

    I am glad someone on the City Council (Sue Greenwald) knows what is going on. City attorney is a critical position in an age of litigation and the new Council should look at this carefully.

  3. Avatar

    “”””””but it would allow the new council to meet for an additional week in closed session to decide what course of action they ought to take.”””””’

    Why closed session , shouldn’t this process be done in the open city council meeting ?

  4. civil discourse

    My guess is the City of Davis was not the only client of the closing law firm. I’m sure there are legal provisions being made to cover all clients, including the City of Davis, as part of the process. If there is one thing lawyers know, it is how to cover their liabilities. This happens all the time and I’m not surprised Sue learned about it from the Vanguard. She is a regular reader.

  5. maconi

    Breaking this story is good reporting and a testament to your work.

    I think it is a bit presumptuous on the part of Harriet Steiner to automatically assume that the City can terminate their existing contract and execute a new one with the new firm she is creating.

    Also, if the City went out to competitive bid, it would likely take 2-3 months to select a new law firm. Perhaps that is a point in her favor.

  6. Ryan Kelly

    If Harriet plans to start her own firm and continue to represent the City, then I’m guessing we would be her primary client. Why not just hire her and put her on a salary, rather than continue to pay $300,000 -$400,000 in legal fees each year to support an office for the benefit of other clients. Or would her salary plus support and office costs be greater than that?

    Having her leave the larger law firm would prevent her having to recuse herself when the City is dealing with issues that also involve other clients of her law firm. That could be a good thing.

    It would be a new contract, with a new firm, new rate of pay for the City. But I’m not so sure about dropping her for a new, untried attorney.

  7. David M. Greenwald

    Ryan: “Why not just hire her and put her on a salary, rather than continue to pay $300,000 -$400,000 in legal fees each year to support an office for the benefit of other clients. Or would her salary plus support and office costs be greater than that? “

    I did a story on that last year, it appears that it would cost the city more to do it in house. There was a particular advantage to having Harriet out of a large firm, probably why McDonough and Best, Best, and Krieger do a lot of the contract city attorney stuff, they are set up to do it rather efficiently. In-house City Attorneys tend to be from larger cities and they tend to cost more. You figure at minimum one assistant and one deputy. Right there you are looking at $350,000 in total comp at minimum, and that does not cover litigation costs.

  8. David Suder

    [quote]Personnel matters and discussions are done in closed session. Final votes would be taken in open session.
    [/quote]

    Please, enough with the closed session! Deciding whether to retain a new firm to serve as the City’s outside attorney is not a confidential personnel matter. While there may be some associated considerations regarding continuity of representation in pending matters that should be discussed in closed session, I can see no reason why most of this discussion should not take place in the open.

    If, as DG says, it has been shown to be more cost-effective to use outside counsel rather than in-house (and I am not sure that is really true, when all costs are considered), now would be an excellent time to solicit proposals from a number of law firms for this work. Although Ms. Steiner has many years of institutional memory regarding the affairs of the City of Davis, there may be other firms who are more qualified in important areas and/or may be more cost effective. Why would the City issue a sole-source contract before considering the alternatives?

    I might also make good sense to query Ms. Steiner as to how much longer she intends to continue practicing. If she intends to retire within the next few years, it would be sensible to begin bringing a new attorney or a new firm on line. Ms. Steiner apparently didn’t inform the Council of the impending closure of her firm, so why would we expect that she would provide reasonable notice when she decides to retire?

    The Council might, logically, decide to retain Ms. Steiner to complete work on pending matters, while engaging another firm for new matters.

  9. Sue Greenwald

    I have spent the last few days trying to convince the Paul Navazio, the assistant city manager, and Bill Emlen, the city manager, to put the certification of election results on the agenda for this Tuesday, June 29, but they chose not to do so. I am disappointed because I think the new council needs more than two, or even three, weeks before the summer break to discuss how to proceed with the city attorney issue. The problem is that we break for August recess on August 1, and our law firm has said that they expect to be dissolved before we return from summer break.

    First, I spoke with the county clerk. She said she thought that she could probably get the certification of the election results to the city by this Tuesday, June 29. Then, I asked Paul Navazio (and Bill Emlen the following day during a break from his vacation), to please put the certification of the results on the agenda. That would have enabled us to swear in the new city council at the end of next weeks’ meeting if the results from the county were in, as is expected.

    I should explain that there is no set time after the election in which we seat the new city council. We do so after the county sends the certification of the election results.

    It made sense to swear in the new council at the end of the June 29 meeting, because no council business is scheduled to occur between then and the time two weeks later that the new council would be seated. Swearing in the new council at the end of the July 29 meeting would have enabled us to start working together on the city attorney issue; an issue that arose after the tentative ingoing-outgoing scheduling had been made.

    The July 6 meeting is only ceremonial, and the new council had been expected to be seated on July 13. The July 6 ceremonial meeting for the outgoing councilmembers could have been held just as effectively with the new council formally seated. We can have non-members at the dias, as in youth and government day. We have a quorum without Lamar and Ruth. Ruth and Lamar could have been seated in their usual positions, and we could have had the same exact meeting to honor Ruth and Lamar that we had planned even if the new council had been formally seated. We also could have had a ceremonial swearing in meeting on July 13 to celebrate the new council members, even if they had been formally sworn in two weeks earlier.

    We have an emergency in that our city attorney’s firm going out of business before we return from August break. It is critical that the new council be able to meet in closed session concerning this issue as soon as possible. Two weeks is not enough, IMHO.

  10. Avatar

    Sue Greenwald ,

    “”””””It is critical that the new council be able to meet in closed session concerning this issue as soon as possible. Two weeks is not enough, IMHO. “””””

    What happened to transparent government ? This lawyer isn’t even a employee of the city , she is contracted !

  11. Sue Greenwald

    Update: The county clerk’s office called me at 4 this afternoon to tell me that the results had been certified and sent to the city, as promised. So we could have sworn in the new council at the end of the June 29th meeting.

    I do think it is important for city leadership to be flexible and proactive when dealing with emergencies or unexpected events.

    I want to thank Freddie Oakley for at least having given us this option, and for being responsive and concerned.

  12. Sue Greenwald

    Avatar,

    When we discuss an individual’s job performance, as would be part of this discussion, we do it in closed session out of respect for privacy.

  13. Rich Rifkin

    Even if you are discussing the city attorney behind closed doors, I would think it is likely that Harriet will uncover every word said about her:

    [img]http://hooray4books.files.wordpress.com/2010/01/harrietthespy.jpg[/img]

  14. eagle eye

    Wasn’t Harriet at the helm when DACHA was created?
    She appears more concerned about Emlen’s interests
    and developer interests than the good of the city taxpayers.

  15. JustSaying

    S.G.–I have spent the last few days trying to convince [s]the[/s] Paul Navazio, the assistant city manager, and Bill Emlen, the city manager, to put the certification of election results on the agenda for this Tuesday, June 29, but they chose not to do so.”

    I don’t understand how our system works: A Councilmember’s repeated requests to include a item on the Council’s agenda are ignored/dismissed/rejected by two employees who work at the pleasure of the Council? Say it ain’t so, Sue.

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