DELGADILLO MAKES CASE FOR HIRINGS CITY ATTORNEY CALLS THE USE OF OUTSIDE FIRMS 'INVESTMENT'.

Byline: Rick Orlov Staff Writer

Defending his use of outside attorneys even as his own staff has grown, City Attorney Rocky Delgadillo on Thursday called the practice a ``short-term investment'' that has saved tens of millions of dollars in legal judgments.

In a 10-page memo to the City Council, Delgadillo said his office has been judicious in its use of outside counsel, relying on private attorneys to handle issues in which the city lacked the expertise - such as complicated cases involving the Harbor Department and the Department of Water and Power.

``It is better to invest in a vigorous defense of the city's resources - sometimes using outside counsel - than to be penny-wise, but pound- foolish,'' he said.

Delgadillo noted that in fiscal 2000-01, the city spent $3.1 million on outside counsel and paid out $92 million in legal settlements. In the fiscal year ending June 30, the city will spend an estimated $5.3 million on outside counsel while liability payouts will be roughly $46 million.

Since he took office in 2001, Delgadillo's own staff has grown from 781 to 820 attorneys.

``Ultimately, the city needs to view the use of outside counsel as a short-term investment for long-term savings,'' he said.

Councilman Antonio Villaraigosa, who had asked for the report in response to news stories about the increased use of outside attorneys, was studying the report. His aides said he still has concerns about whether the city is getting the best deal possible from the law firms.

According to Delgadillo's memo, the city paid $3.7 million to private attorneys for the DWP's successful $166 million lawsuit against the Federal Energy Regulatory Commission.

The Harbor Department case involves a suit with China Shipping Co., affecting a $700 million lease.

In cases involving proprietary departments, the commissions overseeing those agencies determine - in consultation with Delgadillo's office - whether to hire private lawyers.

On cases involving the city general fund, which has averaged outside legal costs of $2.9 million in past years, Delgadillo said the hiring of outside attorneys was overseen by his office along with the mayor and City Council.

``The City Council and mayor ... are the ultimate decision-makers on whether or not more in-house attorneys and support staff should be hired instead of outside counsel,'' Delgadillo said.

Delgadillo's memo did not address political contributions he has received from law firms with which the city does business.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com