Friday, February 17, 2012

$395 per hour for Memorial negotiator

Posted by on Fri, Feb 17, 2012 at 11:27 AM

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The city of Colorado Springs will pay Fulbright & Jaworski, a Houston-based lawfirm, $395 per hour to help negotiate a lease for city-owned Memorial Health System, City Attorney Chris Melcher tells the Independent in an interview.

It's unclear, though, how much the total bill will come to.

Melcher says he's not wild about imposing a not-to-exceed figure, because, "as you get toward the end of that budget, if you still have issues to resolve, it might not work to everyone’s benefit to cut that short."

So, he agreed to pay the firm an hourly rate that will be a "blended" rate, meaning various attorneys who work on the Memorial project charge different hourly rates. But the Springs will be locked into the $395-per-hour rate.

How much is paid isn't material to the city, really, because Melcher says the leasor, University of Colorado Health System, has agreed to pick up the tab for that, as well as election costs. Council members Merv Bennett and Brandy Williams, who are serving as liaisons to the council in the negotiations, say the goal is to place the lease before voters in a special election in August.

Jim Wiehl of St. Louis, Mo., will be the lead attorney from Fulbright & Jaworski, and wrote this to Williams in a Feb. 5 e-mail, obtained by the Indy through a Colorado Open Records Act request:

Typically, a lawyer must be licensed by the state to appear in the state’s courts, or to render advice/opinions on the state’s laws and regulations. For that very reason we have included, in our representaion proposal to Colorado Springs, that Bill Leonne of our Denver, Colorado office, would be part of the Fulbright legal team representing the City. Bill is licensed in Colorado and has practiced in the State for many years. In fact, I believe that Bill worked closely with John Suthers in the Colorado U.S. Attorneys office, and succeeded John as the U. S. Attorney when John became the Colorado State Attorney General. With Bill Leonne (and potentially other Colorado licensed Associates from our Denver office assisting on certain state law research) engaged in the transaction Fulbright will comply with all of the legal requirements of the State of Colorado. I am not licensed in Colorado, but that does not preclude me from
working on the team with Bill and others, and from leading the legal team and advising Colorado Springs on numerous federal health care law issues, including the Anti-Kickback Statute, the Stark Law, the Civil Monetary Penalties Act, tax-exempt issues, tax-exempt bond financing issues, antitrust, pension and employee benefits, etc.

University was chosen in a request-for-proposal process. It proposes to pay $74 million up front and $5.6 million annually for 40 years to lease the hospital, as well as chip in $3 million annually for a period of years to help set up a medical school at the University of Colorado at Colorado Springs.

Other national lawfirms who bid for the Memorial lease work:

— Foley & Lardner, $500,000 to $650,000 range.

— Epstein Becker Green, $350,000 to $500,000 (blended rate of $550 per hour).

— McDermott Will & Emery, attorney fees ranged from $335 to $885 per hour, depending on which lawyer would be working on the project.

— Drinker Biddle & Reath, $150,000 to $175,000 ($525 to $595 per hour).

— WilmerHale. No dollar proposal was apparent in the 571 pages of documents provided to the Indy under its records request. (One member of the WilmerHale team was Tom Strickland, who ran for Congress in 1996 and 2002 and served as a U.S. Attorney. He also was an assistant secretary to the Department of the Interior.)

Melcher says Larry Singer, an attorney and consultant from Chicago who has consulted on the Memorial issue for nearly two years, wasn't interviewed because he is an individual practitioner and "would not bring resources that a large firm can bring." Melcher notes the negotiations will focus on employee retirement plans, outstanding debt, health care quality standards, real estate values, TriCare and Medicare reimbursement, and a number of other issues.

In addition, Melcher says that although Singer had been involved for some time, the city "wanted to make sure everyone had confidence this was an objective process, to have a firm to come in fresh."

Melcher says the negotiations are expected to span 120 days.

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