(The following article by Paul Nussbaum was posted on the Philadelphia Inquirer website on February 19.
PHILADELPHIA -- As a strike deadline looms next month for SEPTA bus, subway, and trolley operators, the transit agency will rely on two labor lawyers from a major Center City firm to help negotiate a new contract.
When Regional Rail workers file injured-on-the-job claims, SEPTA turns to a small wife-and-husband Philadelphia firm to handle the cases.
When contract disputes arise with contractors rebuilding the Market Street Elevated line in West Philadelphia, SEPTA hires a 10-lawyer practice to deal with them.
Though it has 31 lawyers in its own legal department, with an annual budget of $4 million, SEPTA spends about $7 million a year on outside lawyers, spreading the work among 40 firms in Philadelphia and its suburbs. The law firms include some of the biggest, most politically connected practices, as well as relatively unknown boutique operations with only a few lawyers.
"We handle 93 percent of our cases," SEPTA general counsel Nicholas Staffieri said. "But there are some cases that are beyond our expertise or would excessively burden our department."
Staffieri said SEPTA had turned to outside lawyers for such things as local knowledge on real estate matters or for legal expertise in railroad regulation or labor law.
The biggest beneficiary of SEPTA legal spending over the last two years has been Braverman Kaskey P.C., a small Center City firm that has collected $2.6 million during the period, according to SEPTA records. Most of its work is related to legal disputes with contractors for the overbudget, overdue Market Street El reconstruction.
The second-largest recipient of SEPTA legal work is the law firm of Dolores Rocco Kulp. Kulp, with her husband and another lawyer, collected $1.7 million for contesting injury claims by Regional Rail workers.
"There are less than a handful of attorneys in this area that know this work," said Kulp, 57, who has been handling railroad-injury cases for 32 years, dealing with the arcane Federal Employers Liability Act. "I give something to SEPTA that, frankly, nobody else can."
One of the firms whose work will figure prominently behind the scenes this year is Ballard, Spahr, Andrews & Ingersoll L.L.P., home of labor lawyers Dan Johns and Brian Pedrow. Johns and Pedrow collect $300 an hour for aiding SEPTA in its negotiations with its biggest union, Transport Workers Union Local 234, as a March 15 strike deadline approaches.
Ballard Spahr, which collected $1.1 million from SEPTA over the last two years, is well-connected politically: Gov. Rendell, a Democrat, was a partner there, and current SEPTA board member Thomas Jay Ellis, a Republican, is a partner with the firm.
Two other local law firms that do business with SEPTA are represented on the SEPTA board. SEPTA board vice chairman James C. Schwartzman is with Stevens & Lee, which received about $780,000 from SEPTA over the last two years. And recently appointed board member Joseph "Skip" Brion, chairman of the Chester County Republican Committee, is a partner with Buckley, Brion, McGuire, Morris & Sommer L.L.P., which collected about $58,000 from SEPTA.
"I have never been asked by a board member to send a case to a certain law firm," Staffieri said. "Board members have certainly suggested law firms. But there's been no pressure on me. I try to be as nonpartisan as possible."
Dilworth Paxson L.L.P., another firm with deep roots in local politics (founded by late Philadelphia mayor Richardson Dilworth, aided in recent years by indicted former State Sen. Vincent J. Fumo), collected $1.3 million from SEPTA in 2007 and 2008. Much of that went to fight City Hall, particularly the city's challenge to SEPTA's bid to eliminate paper transfers in 2007.
Saul H. Krenzel & Associates, a two-person firm in Radnor, collected $1.2 million, for defending SEPTA against claims by disabled passengers challenging the adequacy of SEPTA's paratransit services and for other issues involving handicapped riders.
Pietragallo, Gordon, Alfano, Bosick & Raspanti L.L.P., an 80-lawyer firm with local offices in Center City and West Chester, collected $1.2 million, primarily for defending SEPTA in employment-discrimination cases.
The $15 million SEPTA spent in the last two years for outside legal help is a relative drop in the bucket among SEPTA expenses. With an annual operating budget of about $1 billion, the money spent on outside law firms represents less than 1 percent of the agency's spending.
SEPTA's hourly rate for outside lawyers was capped at $200 until June 30. Then the rate cap was increased to its current level, $250 an hour, with one exception: Ballard Spahr's labor lawyers will get $300 an hour for their work on the negotiations with TWU Local 234.
Staffieri says the charges are a bargain, given that many firms charge other clients at least twice as much and that financially strapped SEPTA was unable to increase its fees for years.
Given SEPTA's size and complexity - with $3 billion in assets - Staffieri said he was "proud of the fact that our outside legal fees are so low."
Fees and expenses totaled $7.5 million in 2007 and $7.2 million in 2008. The total for 2009 is likely to about the same, SEPTA's general counsel said.
