He’s something else, this guy.
Texas may pay tens of millions of dollars to outside attorneys hired to handle a major lawsuit against Google — money the state did not plan to spend before a scandal enveloped Texas Attorney General Ken Paxton this fall.
That’s under agreements signed last month with outside lawyers based in Chicago, Houston and Washington, D.C., including high-profile plaintiffs’ attorney Mark Lanier and the law firm Keller Lenkner, who will lead Texas’ multi-state antitrust lawsuit against Google.
The lawsuit came out of a Texas-led investigation launched more than a year ago. But until fall 2020, top agency staff intended to handle the case internally, instead of paying costly outside lawyers, a former senior Paxton aide told The Texas Tribune. The Associated Press first reported the timeline on Tuesday.
Jeff Mateer, who led the attorney general’s office for years as Paxton’s top deputy, said that when he resigned in October, the agency had no intention of hiring outside lawyers. Darren McCarty, another senior attorney, was leading an internal team on the case.
“Darren was more than able to do it,” Mateer told the AP.
But Mateer and McCarty were among the eight whistleblowers who left the agency after telling law enforcement they believed Paxton broke the law by doing favors for a political donor. Both resigned last fall, part of a notable exodus of the agency’s top staff.
The whistleblowers’ allegations have reportedly sparked an FBI investigation, but Paxton has insisted that the agency’s work has not been interrupted by the criminal investigation of him. Still, the contracts for the Google lawyers are an early indication of what cost taxpayers may bear for the latest drama surrounding Texas’ embattled attorney general.
The attorney general’s office will ask the Legislature for $43 million to pay the outside lawyers, according to a contract obtained by The Texas Tribune. If lawmakers do not grant that money — which may be a tall order during what’s expected to be a tight budget debate — the outside attorneys will be paid solely out of whatever monetary damages are recovered from Google, dollars that would have otherwise flowed into state coffers.
The expensive outside counsel contracts were inked in December, the same day the case was filed in federal court. The law firms were brought on only after the agency staff leading the probe fled the attorney general’s office in the wake of a fresh Paxton scandal.
Lanier told the Tribune he met with Paxton in Austin in November to discuss the possibility of working on the case, and emphasized that his team’s work was not intended to be “a big financial bonanza for the Lanier firm,” but rather to force a major restructuring of Google.
Lanier has given political contributions to Paxton, among a number of other top Texas officials.
The case, which comes alongside a number of other major government lawsuits against Google and other tech giants, takes aim at the company’s advertising practices.
Though it’s not yet clear exactly how much Texas could end up losing to the outside attorneys, it could be a massive figure. The outside lawyers’ contingency fee will either be based on an hourly rate equation — which could net the most senior attorneys as much as $3780 per hour — or be calculated as a percentage of the total Google settlement, whichever is less.
See here for the last update on the latest Paxton scandal. I will try, at least for a moment, to be as objective as I can about this. Paying the fee up front is a hedge against having to cough up a much larger amount of a hypothetical future award or settlement agreement, not to mention the time and effort it will surely take to haggle over the proper cut of said award. Lawyers cost money, this is going to run into some bucks no matter how you slice it, may as well get some certainty.
On the other hand:
1) The plaintiffs may lose this lawsuit, or have it overturned or any award reduced on appeal. We’d also be splitting any award a couple dozen ways, so it would have to be pretty freaking big for the attorneys’ cut to be more than $43 million.
2) Any future award is just that, in the future, likely years in the future. $43 million bucks now is worth more than an equivalent amount in, say, 2027. This is why Lottery winners who get the up-front payout instead of the over-20-years payout get a lot less than the stated prize amount.
3) Not to put too fine a point on it, but we don’t have an extra $43 million lying around right now. Yeah, sure, Rainy Day Fund yadda yadda yadda, but we know how that works. And yeah, $43 million is couch money compared to the real budget, but what would you rather spend it on this biennium – Ken Paxton’s fancy outside attorneys, or vaccines and the people to administer them? I know where my money would go.
4) Again not to nitpick, but if Ken Paxton hadn’t been a fucking awful Attorney General, we wouldn’t be in this predicament right now. He drove off the senior staff who could have handled this in house. Every dollar that Texas loses out on as a result of this, either up front or down the line, is his fault.
So yeah, I’m a big No on paying the outside attorneys at this time. I’ll roll the dice on the future award being either sufficiently small that the contingency fee is a bargain compared to the $43 million, or so freaking enormous that who cares if the Lanier firm makes out like bandits. And maybe, just maybe, we can get a new Attorney General in 2022 and we can hire another good senior staff, and maybe take the case back from the outsiders. I’ll be very, very interested to see what the Republicans in the Legislature make of this.