Keep up with LAist.
If you’re enjoying this article, you’ll love our daily newsletter, The LA Report. Each weekday, catch up on the 5 most pressing stories to start your morning in 3 minutes or less.
Listen: The $900,000 authorized by the council was blown massively in just the first few days
When City Attorney Hydee Feldstein Soto decided she needed help in a high-profile federal lawsuit around providing shelter for unhoused people in May, she asked the L.A. City Council to approve an initial two-year contract with an outside law firm “not to exceed” $900,000.
The contract was notable for its size — 15 attorneys, each at $1,295 an hour, for a multi-day mini-trial, a follow up brief to the court and a likely appeal of the judge’s ultimate ruling — at a time when the city was facing a nearly $1 billion budget deficit.
But the $900,000 was blown in just the first few days — with no sign of the council being informed or giving its authorization, despite the council’s instruction to keep them in the loop.
The law firm, Gibson, Dunn & Crutcher, billed about $1.8 million for its first 13 days of work through May 30 — twice the entire two-year contract amount — according to a copy of the invoice LAist obtained through a public records request.
The costs have only grown since then. The firm handled another three days of the hearing in June, as well as a written brief afterward, according to court records. No subsequent invoices have been disclosed to LAist, and the City Attorney’s Office declined to say how much the firm has billed taxpayers since May.
A spokesperson for Gibson, Dunn & Crutcher declined to answer detailed questions from LAist, instead deferring to Feldstein Soto’s office.
Feldstein Soto’s office declined to answer LAist’s questions about how much has been billed and under what authority they’ve allowed the billings to exceed the council’s authorization, citing attorney-client privilege.
Ivor Pine, a spokesperson for the city attorney, said in an email that the “firm and its lawyers exceeded our expectations and delivered exceptional results,” adding that they’re continuing to work with Gibson, Dunn & Crutcher on the case and would be pleased to do so again.
“We are grateful for their service and are in the process of reviewing the expenditures and time to ensure that we go back to Council with a complete picture of what was done and charged,” Pine said.
City Council left out of the loop
When the funding came up for City Council approval on May 20, council members requested to stay informed about the contract. They approved an amendment requiring updates to the council “prior to taking action” — emphasizing that the City Council is “the client in control of litigation.”
But Councilmembers Bob Blumenfield and Tim McOsker said they were not informed the budget was blown until LAist reached out to them for comment this week. They also said they want an “immediate” discussion between the council and the city attorney on all invoices related to the case.
“Councilmember Blumenfield had not been informed that the amount authorized for this outside Counsel had been exceeded. He is not happy about learning this news from a reporter,” his office said in a statement to LAist.
“He had co-authored a motion with Councilmember McOsker to ensure regular updates to the Council on this expenditure and he [has] requested that Council get formally briefed as soon as possible,” the statement continued. “He has many questions and concerns, but will reserve further comment until he is properly briefed on the situation.”
McOsker’s office said in a statement that he “was unaware of these invoice issues” before LAist reached out for comment.
“His amending motion with Councilmember Blumenfield, which requires outside counsel and the City Attorney to provide regular updates, was intended to prevent any surprises in billing related to this litigation. That’s why the Councilmember is requesting that this matter be brought to City Council immediately, so the City Attorney can provide a full accounting and discuss all invoices related to the case,” the statement added.
The contract itself requires prior written approval from the city attorney for work exceeding the $900,000 that was approved by council. The contract also says that the firm and city attorney recognize the legal services are being paid with Angeleno’s tax dollars, noting there’s a “heightened duty of care” to make sure Gibson, Dunn & Crutcher carries out the agreement with “moderation, frugality and cost consciousness.”
The City Council has requested a verbal update on the “appropriation and retention” of Gibson, Dunn & Crutcher during its meeting next Wednesday, according to the agenda. It’s scheduled to be in public during open session, but council could go into closed session.
LAist has reached out to the other members of the council’s Budget and Finance Committee — Katy Yaroslavsky, Heather Hutt and Eunissess Hernandez — and will update this story if and when we hear back.
About the invoice
Gibson, Dunn & Crutcher’s first invoice, covering work from May 19 to 30, totaled $1,812,922.78. It was approved for payment by Feldstein Soto’s office, minus a few thousand in expenses, according to documents.
The invoice was signed by two high-ranking members of the city attorney’s office: Chief Deputy City Attorney Valerie Flores and Assistant City Attorney Strefan Fauble. They report directly to Feldstein Soto, according to a City Attorney’s Office organizational chart from last year.
Gibson, Dunn & Crutcher billed nearly $1 million per week on average, based on the invoice’s total dollar amount and timeframe. The $1.8 million bill for the second half of May is equivalent to what the city pays each month, on average, to house around 890 formerly unhoused people in its Time Limited Subsidy program. The subsidy program is currently facing major cuts.
Two of the law firm’s associate attorneys, Graciella Maynetto and Joseph Edmonds, billed more than $165,000 and $155,000, respectively, across the invoice’s 13 days. There were a total of 15 lawyers included on the invoice, including lower-level associate attorneys, all at the $1,295 hourly rate. That’s in addition to city attorney lawyers working on the case.
The firm continued to work on the case for the city in June, July and beyond — including hearings in downtown L.A. — and filed more than 250 pages of court documents. Their work is expected to continue as the city is appealing the federal judge’s ruling to put in place a compliance monitor after finding city officials failed in multiple ways to follow a settlement agreement to create more shelter for unhoused people.