Los Angeles City Council Approves Increased Funding for Legal Firm Amid Controversy
The Los Angeles City Council approved a significant increase in funding for a law firm on Wednesday, igniting intense criticism regarding the handling of a critical homeless case.
A few months ago, Gibson, Dunn & Crutcher charged the city $1.8 million for two weeks of legal work, with rates approaching nearly $1,300 per hour for their 15 lawyers. The situation escalated by August 8, when their costs soared to $3.2 million.
This hefty price tag has understandably frustrated council members, especially since they had previously approved a three-year contract capped at $900,000. The expectation was for regular updates on the homeless case.
Nonetheless, the council voted 10-3 Wednesday, allowing the firm’s contract for this fiscal year, which ends in June 2026, to rise to almost $5 million. Councilmember Katy Yaroslavsky expressed that the services rendered by Gibson Dunn are “essential to protect the interests of the city.”
“We’ve established new oversight mechanisms to ensure that further funding requests require council approval before any additional money is allocated,” Yaroslavsky noted, emphasizing her role as head of the budget committee.
However, not all council members were on board. Tim Makoskar, Adlin Nazarian, and Neecha Raman opposed the increase. Makoskar, also part of the Budget Committee, expressed dissatisfaction with Gibson Dunn’s attempts to reduce costs. After pressure from the council, the firm had trimmed around $210,000 from its bill.
“I think they should have cut more; they’re just not doing enough,” Makoskar remarked post-vote.
Gibson Dunn representatives did not respond to requests for comment immediately after the vote, while Hydee Feldstein Soto, the city’s assistant, supported the council’s decision.
Karen Richardson, a spokesperson for Feldstein Soto, mentioned that Gibson Dunn had already been on the city’s payroll in mid-May, just before a crucial hearing involving the LA Alliance for Human Rights—a nonprofit at odds with the city regarding its approach to homelessness since 2020.
In 2022, the city reached a settlement with the LA Alliance to create over 12,000 homeless shelter beds and other housing options. Since then, the Alliance has accused the city of not adhering to the settlement’s terms.
During the May hearing, overseen by a federal judge and attended by Mayor Karen Bass and council members, it was determined whether to transfer oversight of the city’s homeless programs to a third party. The Alliance’s lawyers indicated that they wanted Bass and two council members to testify.
To prepare for that event, the city hired Gibson Dunn, which played a pivotal role in securing a landmark Supreme Court ruling that prohibited homeless individuals from camping in public areas.
Feldstein Soto praised Gibson Dunn for its work on the LA Alliance case, claiming they helped the city retain control over its homeless initiatives while steering Bass and the council away from the official testimony stand. She commended the firm for its efficiency in navigating complex policy issues and expediting the settlement.
Initially, Feldstein Soto proposed raising the Gibson Dunn contract to nearly $6 million through 2027, but the council ultimately approved just under $5 million for a one-year extension based on the Budget Committee’s advice.
Some of the allocated funds will likely support an appeal against a federal judge’s ruling in the LA Alliance case, as Feldstein Soto noted in a memo.
Facing criticism from various council members, Feldstein Soto agreed to contribute $1 million from her office budget to help cover the costs of the Gibson Dunn contract. The council also redirected $4 million from an account of unallocated funds.
Makoskar highlighted that this transfer of funds significantly exhausts what would have otherwise been available for outside legal firms this budget year, describing the decision as “poor financial management.”
Raman, chair of the council’s homeless committee, clarified that her opposition wasn’t merely about the costs associated with Gibson Dunn but stemmed from larger concerns regarding the spending done without the council’s authorization.
“Being someone who keeps a close eye on finances, I found the whole situation frustrating,” she explained. “So, my ‘no’ vote was a reflection of that frustration.”
