NJ Spent $54M on Outside Lawyers, Lawmakers Raise Concerns

New Jersey shelled out nearly $54 million on outside lawyers last year, even though the state already employs about 550 attorneys of its own, and some legislators are starting to ask hard questions about where all that money is going.

The state’s law division, which functions essentially as the government’s in-house law firm, has seen its outside counsel bill surge 140% since 2019. That year, it paid $22.3 million to outside lawyers. The tab has now climbed to nearly $250 million over that stretch, according to budget documents.

Not a small number.

Assemblyman Al Barlas, a Republican from Essex County, raised the issue directly with Attorney General Jen Davenport during a budget hearing Wednesday in Trenton. He followed up with more pointed concerns the next day. “Listen, I understand that sometimes you have to have outside counsel for certain specialties. It makes sense,” Barlas said. But he questioned whether the state is “spending the money wisely by constantly just going to outside counsel,” and asked whether building up the legal department inside the Attorney General’s Office might serve taxpayers better.

He’s careful to frame it right. Barlas said he’s not pushing for bigger government. But sometimes, he said, “you have to weigh out the pros and cons.”

The timing matters here. This debate is happening as legislators pick through Gov. Mikie Sherrill’s record-high $60.7 billion budget proposal for the fiscal year starting July 1. Sherrill has called for broad cuts to reduce the state’s structural deficit and put New Jersey in a stronger position if a recession hits. Every line item is under a tighter lens than usual.

Davenport, who took over as attorney general in January, pushed back on the characterization that the spending is wasteful. She said outside counsel is sometimes legally necessary, like when the state has a conflict of interest in a case. Other times, the division simply doesn’t have the internal bandwidth, either because attorneys are stretched too thin or because positions have gone unfilled through attrition. Specialized areas of law where nobody on staff has deep expertise are another driver.

There are practical factors, too. When New Jersey gets sued in another state’s courts, it often needs local attorneys who know that jurisdiction. And in some cases, outside lawyers work on contingency, meaning the state pays nothing unless it wins. That’s a way to take on litigation without guaranteeing costs upfront.

Still, the sheer volume is hard to ignore. A budget document listing cases that involved outside counsel last year through mid-March of this year runs 98 pages and covers more than 3,000 cases. The law division handles legal advice for state agencies, defends New Jersey in civil suits, and brings civil enforcement actions against people and businesses that harm the state or its residents.

Davenport also pointed to large, complex cases that can drive up costs fast. She cited an outside review commissioned by former Gov. Phil Murphy as one example of how a single matter can push spending higher.

The law division sits within the state Department of Law and Public Safety, one of 10 divisions the department oversees. It’s a sprawling operation by any measure, which is part of what makes the outside spending figure so striking to some observers. State attorneys general offices across the country have faced similar scrutiny over reliance on private firms, particularly as legal costs have climbed industry-wide.

The New Jersey Monitor first reported on the budget hearing exchange and Barlas’s concerns Thursday.

Barlas said he wants more transparency about how cases get assigned to outside firms and whether the state is doing enough to build internal capacity before reaching for a private attorney. It’s a reasonable ask. Whether the budget process produces any real accountability here, or whether outside counsel costs simply keep climbing as they have for seven years straight, is now a question for Trenton to answer.