Fee(ding) frenzy

DISD taxpayers pay rising legal bills as trustees dither over hiring a full-time lawyer

Gruber insists he is going to get paid in full.
"I'm sorry he feels that way," the lawyer says about Dodd. But he adds, "I didn't work for DISD. I worked for board member Kathleen Leos. The board is just going to have to pay."

Gruber argues that he would have been "negligent" if he had not pursued the campaign finance reports in the face of charges that lawyers representing Harden improperly influenced board members. (Harden's attorney, William Brewer, denies the allegation.)

Dodd also wants to create long-term solutions to the district's galloping legal costs.

"This is my pet project, to stop the hemorrhaging of money," he says.
In the next month, Dodd says, the district plans to replace Eichelbaum with an in-house attorney who is a DISD employee. That lawyer will handle day-to-day personnel matters.

For litigation, the board plans to hire a regular outside counsel. According to Dodd, the trustees are now considering two firms: Austin-based Bickerstaff Heath Smiley Pollen Kever & McDaniel and Dallas-based Vial Hamilton Koch & Knox.

Eichelbaum, however, will not drop out of the picture entirely. He will continue to handle cases that have gone so far that it doesn't make sense to switch lawyers. And he will remain on the district's list of outside lawyers.

It is unlikely, however, that the deal the district struck with Eichelbaum 12 years ago will be repeated.

At the time, district administrator Robby Collins established a $2 million defense fund for potential liabilities for all employees with the Texas Association of School Boards in Austin. TASB administered the fund, but Eichelbaum's firm was scheduled to receive an annual retainer from the interest earned--"a preventive legal retainer," Collins says. Initially, the amount that Eichelbaum received was $100,000 a year. But that figure grew as years passed.

Those annual increases, however, were never reflected in the DISD general budget that the public saw because the payment was made quietly from the TASB account.

At roughly the same time he was establishing the payment scheme for Eichelbaum's firm in 1986, Collins, who now serves as the special assistant to the superintendent on government-relations and security matters, also was pursuing a plan to go into business with the lawyer and his partner.

Records with the Secretary of State's office in Austin reflect that Collins, Eichelbaum, and his partner Leonard Schwartz established a business entitled Casenet Inc. in 1986.

Collins and Eichelbaum say the venture, intended to market an on-line service of information about court and state agency decisions that affected school administrators, never got off the ground. "I never put any money in or took any money out," says Collins.

But Collins concedes that had the business taken off, he could have faced a possible conflict of interest. Collins was the administrator responsible for hiring and overseeing the outside contractor Eichelbaum and Schwartz.

It is unlikely, with the current questions about lawyers' bills, that Collins or anyone else will propose a payment scheme where lawyers receive their money quietly.

"Everything got out of control at DISD," says outside lawyer Martin, "and now they need to fix it.

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