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The Daily Tar Heel

UNC’s expensive outside counsel criticized

Experts question whether the University hired the best possible law firm.

It’s not clear what the University expected when it sent a letter to the Attorney General’s office asking for permission to hire an expensive, New York City-based law firm for help with several high profile lawsuits on Dec. 29 — leaving the Attorney General’s office just 24 hours to respond before one of those lawsuits was to head to mediation.

On Dec. 30, a case involving UNC and 10 media organizations, including The Daily Tar Heel, reached a settlement during mediation. As a result, the University released the personnel files of four employees fired for their involvement in the academic scandal uncovered by the Wainstein report.

Michael Scudder, a representative from the law firm Skadden, Arps, Slate, Meagher & Flom, attended the mediation. Though his firm’s counsel was ultimately approved for other lawsuits related to the Wainstein report, the attorney general’s office did not receive notice that Scudder would attend the mediation until one day before the meeting.

According to public records obtained by The Daily Tar Heel, David Parker, the interim general counsel for the University, asked for permission to retain a Skadden representative for several high profile lawsuits against the University — an admissions lawsuit, former football player Michael McAdoo’s lawsuit, former academic tutor Mary Willingham’s lawsuit, a lengthy request from the University’s accrediting body and the lawsuit involving the 10 media organizations.

Noelle Talley, a spokeswoman for the North Carolina Department of Justice, said her office received notice that Skadden would attend mediation on Dec. 29 — one day before the University’s planned mediation with the news outlets. 

By Jan. 9, the letter, which underwent several revisions, no longer listed the news outlets’ lawsuit as one approved for outside counsel. 

In one revision, dated Jan. 5, a staff member in the Attorney General’s office crossed out Parker’s request for Skadden’s help with the media organization’s mediation by hand. 

It’s not clear whether it was removed because the attorney general’s office didn’t approve of the request or because the lawsuit was resolved in mediation the week before.

In order for a state institution to hire outside counsel, the governor and the attorney general must give permission to do so, according to North Carolina general statutes.

The statue says the Attorney General’s office must advise the Governor if it is “impracticable” for the Attorney General to handle the legal services of the state institution in question.

“We consider ‘impracticability’ on a case-by-case basis with general considerations including conflicts, specialized legal expertise required, workload involved, etc.,” Talley said. 

Rick White, a spokesman for the University, said the Attorney General granted UNC approval to bring Skadden to mediation, despite the suit not appearing in the final letter approving UNC’s request for outside counsel.

“Skadden was there at the mediation,” he said. “We don’t know why their name was crossed off. But they were there, and they were there with the permission of the Attorney General.”

Changes in counsel

UNC’s longtime general counsel, Leslie Strohm, left her position at UNC in January for a similar job at the University of Louisville. The position has been temporarily filled by Parker, but he has not been named the permanent position.

In a November email to the campus, Folt described the process of selecting a search committee to locate appropriate candidates for the new general counsel. White said Folt has yet to appoint a search committee to select an individual suited to fill the position.

In January, approximately two months after announcing Strohm’s departure, UNC said it was retaining Skadden for outside counsel in its legal affairs. Skadden partners will charge as much as $990 an hour for their services.

With the lack of leadership at the helm of the general counsel office and the outside help brought in for UNC’s legal battles, there is uncertainty about the future of the general counsel position.

“It’s not a question of an outside counsel of taking the place or filling the gap,” White said. “David Parker is filling the role now, and he’s filling it very ably. The University and the Chancellor have full faith in David Parker.”

Parker declined to comment for this article. White said while the position is not currently filled, it will not go extinct. 

“I think the University will always have a general counsel,” White said. “The outside counsel can help us integrate legal strategies. It doesn’t mean our inside counsel isn’t qualified, it means the outside counsel has specific expertise.”

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White said if Parker were to show interest in the position, then the yet-to-be-named committee will certainly consider him in its search. 

White said the general counsel search committee, once selected by Folt, will likely include people on and off-campus and some individuals from the UNC School of Law. The search committee will then identify the individuals they deem most capable of serving as UNC’s general counsel.

“The candidates could be anyone with good legal experience — legal experience at another university, someone with general counsel experience but not a university experience, maybe someone with a corporate background,” he said.

Hugh Stevens, a UNC alumnus and attorney for North Carolina-based Stevens Martin Vaughn & Tadych, PLLC, hopes the individual ultimately selected for the general counsel position has an understanding of UNC’s role and obligations in North Carolina.

“I know there are some very qualified people right under the noses of our administration,” he said. “I could name one or two people in the law school who could do an excellent job.”

White does not expect that UNC’s current high-profile legal battles will dissuade those qualified for the general counsel position from being interested in the position.

“Looking just by what I’ve heard from other positions on campus, this is still a very desirable place to be,” White said. “Based on past experience and not looking at this job in particular, people will want to come here.”

An outsourced office

Stevens said he’s confused why UNC would go out of state for its legal help.

“In talking with people I keep hearing the questions: ‘Wasn’t there anyone in North Carolina capable of handling this work for the University — someone with North Carolina ties who would have an understanding of the University and its culture?’” said Stevens, who serves as outside counsel to The Daily Tar Heel, The News & Observer and WRAL. 

Patrick Fitzgerald is the primary Skadden partner who will work with the University. Fitzgerald is based in Chicago and refused to comment for this story. 

Mark Finkelstein, trial lawyer from Smith Moore Leatherwood LLP and president of the Tenth Judicial District Bar of Wake County, brought to light the stark price difference between in-state and out-of-state lawyer fees.

Finkelstein said the most expensive North Carolina lawyers typically bill an hourly rate in the $500 range.

“I’ve worked with lawyers from Skadden in the past, and it’s a spectacular law firm — one of the best in the country. If you need to work with the federal government, they’re particularly well-situated to do this” he said. 

“On the other hand, if your issue is a North Carolina trial or issues of North Carolina law, you would be perhaps poorly served by hiring them because they don’t even have an office in North Carolina.”