Lawyers Seek to Regain Fees Lost to O.C. Crisis : Courts: Group would represent the poor under a ‘flat-fee’ system that legal experts have sharply criticized.

A small group of private attorneys, stripped of millions of dollars in county legal work, have banded together to win back a share of the business by offering cut-rate prices to represent poor people under a flat-fee system widely condemned by legal experts.

Faced with a $7.4-million cut in the county’s budget for “alternate defense” work, lawyers led by William Stewart--criticized in the past by judges for neglecting his contractual duties to defend the poor--are seeking legislation that would allow the county to hire private law firms to handle some duties of the county’s salaried public defenders.

The attorneys are offering “flat-rate” fees for handling the easiest types of high-volume legal work--misdemeanor cases and felony probation violations--which would net them the most money quickly.

Riding the popular crest of privatization proposals that have streamed in since the county declared bankruptcy, the lawyers have significant support--from Supervisor Roger R. Stanton, who has long advocated looking at the cost-effectiveness of replacing public defenders with private attorneys, and Supervisor Jim Silva, whom Stanton helped win a supervisorial seat in last year’s election. Both officials have asked to see competitive bids for indigent defense that could take effect July 1.

The lawyers angling for this business acknowledge that they are fighting to regain big money they lost in January, when the Board of Supervisors approved a huge cutback in the public defender’s office and virtually wiped out the pool of money set aside to pay private attorneys who had to be hired when the public defenders had a conflict of interest. Since 1992, private attorneys had received nearly $9 million a year in fees for such court-appointed work.

A month ago, the attorneys met with former Orange County Supervisor Bruce Nestande to ask his advice on how to change state law to allow them to contract for the handling of misdemeanors and felony probation violations. By statute, the public defender’s office must handle such cases in counties with large, urban populations.

The attorneys said they are not paying Nestande--recently named to head a committee overseeing a management audit of the county--nor did Nestande seek any payment or offer his services. Nestande said he does not recall exactly what advice he gave during the 45-minute breakfast meeting at Mimi’s Cafe in Tustin.

But some of the attorneys have since approached Sacramento legislators about getting the law changed. One attorney, Edward W. Hall, even drafted sample legislative language for lawmakers that would allow Orange County to contract for the work.

At least one legislator, state Assemblyman Curt Pringle (R-Garden Grove), is toying with the draft of a bill that would allow the county to begin a pilot program allowing the public defender to contract for criminal defense services beginning in July.

“This is a good opportunity to save the county money,” said Hall, a Santa Ana attorney who has asked to help handle the projected 10,000 misdemeanors cases that come through Municipal Court in Santa Ana each year, at $100 per case. “And this way, the public defender’s office can devote its energies toward felonies and ‘three-strikes’ cases.”

But it is not at all clear whether any money would be saved--studies show that public defender representation of indigents is cheaper--or whether private attorneys being paid flat fees would have the necessary incentive to provide adequate legal representation guaranteed by the Constitution.

“Those attorneys are trying to do what any good business person would do: pick off a part of a business where you think you can make a profit,” said Orange County Superior Court Presiding Judge James L. Smith.

“But it doesn’t take a rocket scientist to figure out that there is some relationship between the fees charged and the quality of services rendered,” Smith said. “If you make widgets at 10 cents a piece, you’re not going to spend a lot of time fine-tuning those widgets. Some are perhaps not going to be up to specifications. The lower the price you charge and the higher the volume you produce, the more likely it is that you’re going to have significant problems.”

Smith and others believe that the attorneys, who held contracts to represent indigent defendants when the public defender declared conflicts in cases, are grabbing some of the legal work that takes the least time and effort, rather than offering to replace the public defender’s office outright.

“If you use the analogy of repairing a car, then these attorneys want to fill up the gas tank, wash the windows or put air in the tires,” Smith said. “But they don’t want to get down and dirty and start pulling the engine or replace the crank. That takes a lot more effort.”

Legal scholars and experts--as well as the American Bar Assn. and the California State Bar--argue that flat fees are a disincentive to good legal work and that it is bad policy to pay a lawyer the same fee whether he works hard for a deserving client or does virtually nothing.

“There is obviously a problem when people are being paid with the strong incentive to plead people out,” said Robert Fellmeth, a law professor at University of San Diego and director of the statewide Center for Public Interest Law. “Nobody should have an incentive to create an assembly line of pleas regardless of what the defense calls for. That’s assembly-line abuse.”

The American Bar Assn., in detailing its standards for proper defense services, lambasted the use of competitively bid “flat-fee contracts” that seek defense work “based solely on a concern for the cheapest possible system.”

“These programs, as the experience of the past decade shows, have conspicuously failed to provide quality representation to the accused, and in many cases have resulted in even higher costs to the jurisdiction than if another model had been chosen,” the ABA said.

In 1985, the ABA condemned the use of contracts based solely on cost.

Similarly, the California State Bar’s Board of Governors rejected the use of flat rates, particularly if they include no provision for increasing fees based on the caseload or “extraordinary” circumstances.

“Contracts should not be awarded solely on the basis of competitive bidding without consideration of objective standards of representation,” the board wrote. “Experience with competitive bidding indicates that too often it encourages attorneys and counties to ignore adequate client representation in favor of financial advantage.”

Last July, the Orange County Bar Assn. Board of Directors approved a resolution that opposed efforts by county supervisors to farm out some of the public defender’s work to the lowest bidder.

Attorneys seeking the work, however, disagree with such logic, arguing that the high volume of cases is exactly what ensures that everyone will receive proper representation.

“If the volume is there to make this lucrative without worrying about any individual case, then the argument against us goes out the window,” said William G. Watson, who is seeking the contract in Municipal Court in Fullerton to handle misdemeanors. The Fullerton law firm of Curran and Watson has been paid $2 million in contract work since 1992.

“The public defender has a budget and has to live within the confines of that budget,” Watson said. “What difference does it make if the public defender represents people for X-number of dollars or whether we figure out what it costs and break it down to a flat rate?”

Watson proposes that he and several other attorneys handle the projected 10,000 misdemeanor cases per year in Municipal Court in Fullerton for $100 each and, in his proposals, says the group expects to earn $1 million annually.

Robert M. Viefhaus, who heads the Defenders of Orange County, a group of private attorneys, has asked that he be awarded the indigent defense contract for Municipal Court in Westminster, also for $100 a case. Edward Hall is seeking to handle the Santa Ana court’s misdemeanors for the same price.

Stewart, whose law firm earned $2.4 million over the last three years, and Gary M. Pohlson, the new Orange County Bar Assn. president, are competing for a proposal to represent indigent adult defendants charged with felony probation violations. Pohlson has offered to handle such cases for $125 each. Other types of cases--such as those in which an indigent defendant enters a plea of insanity or is found to be insane--would be done for $250 per case.

Stewart’s proposal is a vivid illustration of the horse-trading that he is willing to undertake in order to win the contract. Stewart has offered to handle felony probation violation cases at $150 per case and other types for $400 each--but he says that he’ll drop that $400 fee to $251 if it can be shown that the public defender can do it cheaper than Stewart believes.

By Stewart’s calculation, the county could save from $300,576 to $1.3 million a year by awarding him the business.

Throughout much of 1994, Stewart was under attack from several judges because he had not been in court in more than four years, had farmed out many of the cases he had under an alternate defense contract to lawyers outside his firm, and his firm apparently lacked enough lawyers to ensure that defendants were always represented at scheduled court hearings.

Stewart could not be reached for comment last week, and a telephone company recording said his business phone had been disconnected.

An alternate defense contract that Stewart has held for more than a decade was up for renewal this year, but after Orange County declared bankruptcy, supervisors practically did away with the entire budget to pay private attorneys who handled cases in which the public defenders had a conflict of interest. Such conflicts arise most often in cases involving more than one defendant, or when a witness in a new case turns out to be a client in an old one.

But in January, the public defender’s office was divided into three parts so that all conflict cases could be transferred to a second, separate office staffed with “alternate” public defenders. If the alternate public defender has a conflict, cases are sent to a third lawyer.

Public Defender Ronald Y. Butler, whose office may soon be forced to compete with the private sector for defense work, is not talking about the proposals.

“The only thing I can say is numerous private attorneys are making proposals and submitting them to county government, under the claim they can do it cheaper,” he said. “At this time, I’m not in the position to comment about the credibility or feasibility of privatization. This is not the time to get into a debate. We are trying very hard to comply with the Board of Supervisors’ direction, and so far we’ve been successful.”