CHICAGO - Law firms that have worked as bond counsel for Chicago bond issues will be asked to supply information on lawyers and the amount of time they spent working on the issues, a Chicago alderman said yesterday.
Alderman Ed Burke, who is chairman of the city council finance committee, said he will write letters to the law firms requesting the information in the wake of questions by members of the City Council over legal fees earlier this week.
At Wednesday's finance committee meeting, Alderman Robert Shaw questioned legal fees paid to Chapman & Cutler. Citing a recent newspaper article about alleged overbillings by a partner at the firm, Shaw threatened to hold up final approval of an airport bond issue unless the city complied with his request for a list of bond counsel firms that worked on past city deals, their hours, and their fees.
While the finance committee approved the bond ordinance for the airport issue on Wednesday, Burke said he held it in committee and did not put it on the agenda for yesterday's city council meeting because the city's law department was unable to supply Shaw with the information he requested.
Burke said he will write the managing partners at the law firms "to see if they can comply with Alderman Shaw's request."
David Williams, a partner at Chapman & Cutler, said that while the request is not "typical," the firm does keep tract of attorneys' hours and can provide the city with that kind of information.
"It's not a city practice with us or anyone else," Williams said.
But, he said, he will check with the city's law department before his firm complies with Burke's request.
Chapman & Cutler has denied assertions contained in a Wall Street Journal article that James E. Spiotto, a partner at the firm, charged his clients for 6,022 hours of work last year, or $2.3 million, which is double the hours billed by an attorney at a typical large law firm. The law firm also said that Spiotto did not work for the city of Chicago last year.
An attorney at another Chicago law firm that has served as bond counsel to Chicago said the request for hourly billing information was not unusual.
"More and more clients want to know what they are paying their lawyers for. It's part of a national phenomenon," said the attorney, who asked not to be identified.
The city's law department negotiates fees with bond counsel on a perbond basis, taking into account many factors, including the complexity of a transaction, tax matters, time spent by lawyers on an issue, and the size of a bond issue, according to a department official.
During Wednesday's committee meeting, Alderman Lawrence Bloom also proposed amending the bond ordinance for a $310 million revenue bond issue for O'Hare International Airport to require the city to detail the hours bond counsel work on the issue and their hourly fees. However, the amendment went undiscussed at the city council meeting yesterday because the the bond ordinance had been held in the finance committee.
The city had planned to issue the airport bonds this summer, with Morgan Stanley & Co. as the senior manager and Katten, Muchin & Zavis as bond counsel. Burke said the issue could come up at the finance committee's July meeting or that a special city council meeting could be called if the bonds need to be issued right away.