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Top Legal Expert Critical Of Amtrak Legal Department's Relationships With Outside Law Firms

"Instead Of Being The Aggressive Protector Of Amtrak's Interests,
Many In The Law Department ... View Themselves As The Advocates
For Outside Counsel" - John W. Toothman, Esq.

Press Release from
U.S. House Transportation & Infrastructure Committee

Steve Hansen
Director of Communications


 

Washington, D.C. - An expert forensic legal fee analyst hired by the federal government to investigate Amtrak's extensive legal expenses with private law firms has found numerous questionable management practices and lax oversight over tens of millions of legal expenses billed to Amtrak each year.

"Amtrak's Law Department is not fulfilling its role," John W. Toothman, Esq., wrote in his 102-page report. "Instead of being the aggressive protector of Amtrak's interests, many in the Law Department, including upper management, seem to view themselves as the advocates for outside counsel."

Toothman was hired for his expertise in analyzing legal billings to assist in a federal investigation of Amtrak's Legal Department by the National Railroad Passenger Corporation (Amtrak) Office of the Inspector General and the U.S. Department of Transportation's Inspector General. The investigation was requested by U.S. Rep. John Mica (R-FL), a senior Member of the House Transportation and Infrastructure Committee, and U.S. Rep. Don Young (R-Alaska), the Chairman of the Transportation and Infrastructure Committee.

A copy of the redacted Toothman report can be accessed on the Transportation Committee's website at: www.house.gov/transportation

On Wednesday, the Transportation Committee released the report by Amtrak Inspector General and DOT Inspector General which outlined numerous examples of mismanagement and lack of oversight for more than $100 million in taxpayer-financed legal fees paid by Amtrak during a three-year period (2002-2005). This report is also on the Transportation Committee's website.

Summary Of Toothman's Findings

Toothman was selected to assist the Amtrak and DOT Inspector General investigation as one of the top U.S. experts in the field. He is a former Department of Justice attorney, an experienced litigator, and a Harvard Law graduate who has published extensively on the subject of legal fees billing.

He is regularly retained by public entities and large private clients who feel the performance of their legal counsel is in question. He is regarded as an expert in managing outside counsel and litigation in general.

Some of the major findings in his report include:

Questionable Process For Selecting Outside Legal Firms

"Amtrak's in-house lawyers appear to have been co-opted by their outside firms, they rarely select new outside firms, they are making no apparent effort to engage in a thorough law firm selection process, and the firms they use are among the largest and most expensive in the country."

Questionable Billings & Expenses By Outside Legal Firms Are Rarely Challenged

Instead of challenging many of the fees and expenses billed by the outside legal firms, Toothman wrote: "Amtrak's Law Department acts as though its job is to defend outside counsel, not manage them. The attitude exhibited by Amtrak's Law Department when their handling of outside lawyers was questioned was to defend the lawyers and provide excuses for not reviewing them more aggressively.

"This is a bad sign, indicating that the Law Department has lost sight of its primary job: To protect the interests of Amtrak."

Other Legal Firms Could Provide Less Expensive Service

"Amtrak's Law Department has not investigated its firms properly and not considered alternative law firms that would be cheaper and provide equivalent, if not better, services," Toothman wrote in his report. "There are thousands of firms with expertise handling most of the work done for Amtrak - most of Amtrak's work is routine, both in subject matter and complexity."

Toothman said using smaller firms outside "expensive metropolitan areas, would save Amtrak millions a year in legal fees."

Lack Of Oversight & Enforcement Of Legal Bills

Toothman said after examining a sample of bills from six law firms billing Amtrak the largest amounts, "I noted pervasive, obvious violations of the Billing Guidelines and general billing standards. There was almost no indication that anyone from the Law Department is reviewing the content of the bills, let alone enforcing the guidelines."

For additional information, access the Transportation & Infrastructure Committee website at:

www.house.gov/transportation


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