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The Fraser City Council will pay more for the services of their attorney next year, the first rate adjustment in five years.
Councilmembers last week approved a four-year contract with Donald DeNault Jr. of the Sterling Heights-based law firm of O’Reilly Rancillio. The new rates take effect Jan. 1.
City Manager Elaine Leven said the city went out for bids on legal services in 2022 but “we never moved forward with that.”
The new per-hour rates include:
Those rates would be “locked in” for four years, and potentially longer if the city continues on a month-to-month basis after the agreement expires, DeNault said in a memo outlining the changes.
That includes general counsel work, attending council meetings, drafting ordinances and contracts, assisting in the sale or purchase of real estate, providing legal advice, and serving as the local prosecuting attorney.
For “cost recovery” projects, the rate will be $210 an hour for principals, $185 for associates, and $120 for legal assistants/law clerks, according to the memo. Those rates are for legal work that will be reimbursed by a developer or other applicant seeking city approvals such as planned unit developments, conditional rezonings, and consent judgments.
According to the memo, DeNault said by comparison within the legal services market, the firm’s standard rates range from $250-$400 per hour. For school district services, rates in the industry generally exceed $300 per hour.
In addition to a minimum retainer, the firm’s public sector client rates range from $160-$295 per hour for principal attorneys, $135-$250 for associates, and $85-$190 for legal assistants.
DeNault said much has changed in the legal market over the past five years that resulted in the increases, including the economy, the labor force, the talent pool, competition for talented lawyers and staff, overhead costs, and the cost of living.
“Those evolutions have caused us to update our rates for every client. I delayed doing so for Fraser as long as I could,” he wrote to the council.
The memo states key factors for the adjustments are the economy and inflation. O’Reilly and Rancilio has absorbed the cost of inflation under both the old and new contracts as an it continues upward.
One item that is unique to Fraser is a “cap” on the cost of legal services. The city has had a monthly limit of $10,000 for general counsel services, and the new agreement calls for a $13,000 cap on general counsel services and $40,000 a year on specialty services.  Any amounts over and above those caps will be waived, DeNault said.
During the past five years, the cap has resulted in more than $40,000 in free legal services for Fraser because of the cap clause, the memo states. DeNault said the “Fraser only” deal renders the hourly rates “largely irrelevant.”
 
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