President Bans Contingency Fees to Outside Firms Who Represent Feds

Today President Bush issued an executive directing agencies who use outside counsel not to use contingent fee agreements. Executive Order: Protecting American Taxpayers From Payment of Contingency Fees, May 16, 2007:

Section 1. Policy. To help ensure the integrity and effective supervision of the legal and expert witness services provided to or on behalf of the United States, it is the policy of the United States that organizations or individuals that provide such services to or on behalf of the United States shall be compensated in amounts that are reasonable, not contingent upon the outcome of litigation or other proceedings, and established according to criteria set in advance of performance of the services, except when otherwise required by law.

The U.S. Chamber of Commerce (speaking through its affiliate, the Institute for Legal Reform) is very pleased with the order. It has been urging similar measures on the state level. U.S. Chamber Applauds White House Ban on Trial Lawyer Contingency Fees, press release, May 16, 2007.

I wonder how often the federal government contracts with outside counsel. Is this executive order's impact supposed to be practical, rhetorical, or both?

(The Institute for Legal Reform is doing its best to publicize it. I learned of it not through my regular news sources but from an email message from the Managing Editor of the Institute for Legal Reform. That's OK -- I'm glad to learn of legal developments. But I wonder how widely he's spreading the word. What email list was I on that led to this mailing?)

The Institute for Legal Reform's page on Washington State says that the state AG is the only official authorized to hire outside counsel and that state law is silent on contingent fees.

I'm sure the multi-state tobacco litigation prompted or fueled the antipathy to contingent fee agreements for government work. For information about the different fee agreements the states had with their counsel, see Congressional Research Service, Attorneys' Fees in the State Tobacco Litigation Cases, Sept. 23, 1997 (Washington is on p. 19).

Some articles, if this issue grabs you:

• Meredith A. Capps, "Gouging the government": why a federal contingency fee lobbying prohibition is consistent with First Amendment freedoms, 58 Vanderbilt L. Rev. 1885-1923 (2005).
• Kris W. Kobach, Contingency fees may be hazardous to your health: a constitutional analysis of Congressional interference with tobacco litigation contracts, 49 S. Car. L. Rev. 215-245 (1998)
• Charles Silver and Lester Brickman, Contingency fees: should plaintiffs lawyers in the tobacco settlement receive billions of dollars?, ABA J., Sept. 1997, at 74 (includes both a pro and con position).
• David Edward Dahlquist, Inherent conflict: a case against the use of contingency fees by special assistants in quasi-governmental prosecutorial roles, 50 DePaul L. Rev. 743-98 (2000).