First-year Attorney General Austin Knudsen recently made waves, and drew national attention, by firing Motley Rice, the law firm hired by his predecessor, Tim Fox, for Montana’s high-profile opioid litigation. Some have chosen to look at the termination only from a political angle, focusing on Motley Rice, Tim Fox, and Joe Biden. But the real story here should be about how Knudsen’s decision advances good government and highlights the importance of protecting the public trust in these high-profile, lucrative public contracts for outside counsel.
To be sure, Motley Rice is such a major player (and donor) in Democratic politics that its lead partner, Joe Rice, has been a rumored ambassadorial candidate for President Biden. And it surely raised some eyebrows that, after hiring Motley Rice, former-AG Fox joined Morgan & Morgan, the trial lawyer shop that flew presidential-brother Frank Biden to Inauguration Day on the firm jet and give big money to the Biden campaign.
But a key part of the story should be about how the terminated contract was missing many of the most basic protections that should be in these types of outside-counsel deals, and how good governance and honest stewardship call for better protection of Montanans in the future.
For starters, the now-terminated Motley Rice agreement had virtually no scope limitations — it had no expiration date and covered all future suits over “manufacturing, distribution, marketing, and sale of opioids.” Best practice is to tie a state outside counsel contract to a particular defendant or ongoing case, and to have an expiration tied to a date certain (subject to renewal) or to the end of a particular piece of litigation. These contingency contracts give outside counsel a claim to a percentage of the state’s winnings from litigation or settlement, and it is crucial that the state protect itself by making clear what cases are covered by the contract, rather than handing out an amorphous lottery ticket on the public’s bank account. The Motley Rice contract was basically the opposite of best practices in this respect.