The University’s annual bill for outside legal fees topped out at $4.4 million for the 1997-98 academic year, more than doubling expenditures paid for the previous year.
At any given time, more than 200 cases filed against the University — ranging from individual employment disputes to multi-million dollar tangles with federal agencies — force the Office of the General Counsel to seek costly outside legal representation.
Although University head attorney Mark Rotenberg’s desk is still piled with paperwork, he said he is optimistic that new initiatives approved by University President Mark Yudof will decrease the workload, making the legal office more self-reliant.
The first measure will add two lawyers to the 13-member legal team.
“It will help incrementally,” Rotenberg said. “Two new lawyers will add 3,000 to 4,000 hours of legal service.”
Private law firms charge heftier legal fees and incur several marginal costs. Everything from copying legal documents for clients to rent for office spaces downtown can crank up the cost of hiring private firms, Rotenberg said.
More than half of the $4.4 million tab stems from the ongoing National Institutes of Health lawsuit, a January 1997 action filed against the University for improper handling of grant money.
Minnesota’s largest law firm, Dorsey & Whitney, handled much of the suit with legal fees soaring to $1.7 million. Thirty-one other firms provided legal assistance for a wide array of disputes. Rotenberg noted that University attorneys work about 40 percent cheaper per hour than private ones.
The office is interviewing applicants for the two new positions and one existing vacancy. Rotenberg said the office has scanned more than 140 rÇsumÇs from prospective employees across the country.
Another way the office tries to ward off excessive litigation is through preventative law workshops.
According to the general counsel’s annual report to the Board of Regents, the office has conducted a number of seminars educating faculty, staff and students on matters such as employment law, intellectual property issues and medical liability concerns.
“We want to make our office far more approachable and service-oriented,” Rotenberg said.
A Web site will be up and running by fall quarter and equipped with biographical sketches of general counsel staff, question and answer sections, and a rundown of legal developments pertinent to the University community, Rotenberg said.
He said informing employees of arbitration processes within the University is the best way to avoid expensive litigation.
“Too often the reflex is to litigate to death,” he said. “We want people to be more prepared to use internal resolution dispute mechanisms.”
But local employment attorneys often caution University employees against viewing the internal arbitration process as their only avenue for legal recourse.
Marshall Tanick, a Minneapolis lawyer specializing in employment law, said the process is too often tilted in favor of the University, not the employee.
“In theory it’s a good idea,” Tanick said. “But in my experience, the University has not created a level playing field.”
Rotenberg cringed when he talked about the prospect of every University employee dispute heading for a jury trial. And while the office cannot directly control the onslaught of litigation, the number of cases has come down slightly from 230 in 1996-1997, according to the report.
The courts are also recognizing a pattern of knee-jerk litigation, Rotenberg said. The Hennepin County District Court reversed a jury verdict on June 22 that awarded $532,000 to Robert Shaw, a former University construction project manager, stating that the courts did not have jurisdiction to hear the case.
Shaw claimed the University terminated him unlawfully and discriminated against him because of his depression.
The decision to dismiss Shaw’s claim was based on a June Minnesota Supreme Court ruling that a University employee must file an appeal, not a lawsuit, after exhausting the internal arbitration process.
Rotenberg said it will take several months to see what repercussions the rulings will have for future employee grievance claims.
The University has enjoyed some success defending against the heavy load. Forty-three judgments in the past year favored the University. The Office of the General Counsel lost one case without a settlement; two cases resulted in a mixed decision, according to the report.
Rotenberg said the office has seen a moderate decline in the number of medical malpractice lawsuits, a trend he attributes to the sale of the University hospital.
Rotenberg also highlighted cases that saved the University hefty sums. The University settled for $6.75 million in November with the investment firm Piper Jaffray Companies.
A dispute arose in 1994 when investment advisors from Piper Jaffray failed to inform the University of potential investment risks.
Two other decisions saved the University more than $1 million.
In May, the Minnesota Court of Appeals overturned a $675,000 decision in favor of former head gymnastics coach Katalin Deli. She claimed the University was liable for her emotional distress after breaching oral agreements. She was fired in April 1993.
“It’s very rare that these cases bring cash into the University,” Rotenberg said. He added that the University is the defendant in more than 95 percent of the cases.