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

New Jersey paid $54 million to outside law firms last year while keeping 550 attorneys on its own payroll, and Bergen County legislators aren’t the only ones who want an explanation.

The state’s law division functions as the government’s in-house legal operation, but its outside counsel spending has jumped 140% since 2019. That year the tab was $22.3 million. Stretch it across the full period and the cumulative total runs close to $250 million, according to budget documents. That’s not rounding error. That’s a policy choice.

Assemblyman Al Barlas, a Republican from Essex County, put the question directly to Attorney General Jen Davenport at a budget hearing Wednesday in Trenton. He didn’t let it drop the next day either. “Listen, I understand that sometimes you have to have outside counsel for certain specialties. It makes sense,” Barlas said. But he pressed hard on whether the state is “spending the money wisely by constantly just going to outside counsel,” and whether building headcount inside the Attorney General’s Office might serve taxpayers better than perpetually sending checks to private firms.

He’s not calling for bigger government. He’s careful about that. But Barlas said “you have to weigh out the pros and cons.” That’s a fair point when you’re staring at a list of 3,000 cases farmed out over roughly 14 months, documented across 98 pages of budget appendix material.

The timing sharpens everything. Legislators are working through Gov. Mikie Sherrill’s $60.7 billion budget proposal, which covers the fiscal year starting July 1, 2026. Sherrill has pushed for cuts to address the state’s structural deficit. Every expenditure is getting scrutinized harder than usual. State attorneys general offices around the country face similar pressures, but New Jersey’s numbers stand out.

Davenport, who took office in January, defended the spending without flinching. She said outside counsel isn’t discretionary in every situation. When the state has a conflict of interest in a case, it’s legally required to go outside. When staff attorneys are stretched and vacancies sit unfilled because of attrition, there’s no other option. Specialized legal areas where nobody on the permanent roster has real depth are another driver.

There’s also a geography problem. When New Jersey gets sued in another state’s courts, it can’t walk in there with Trenton lawyers who don’t know that jurisdiction. Local counsel isn’t optional in those situations. And some outside lawyers work on contingency, meaning the state doesn’t pay unless it wins. That arrangement can make sense for complex litigation where the upside is significant and the state doesn’t want to guarantee costs if the case goes sideways.

None of that fully explains 98 pages and 3,000 cases. The New Jersey Monitor first reported the spending figures that touched off this week’s exchanges. The law division’s work covers a wide range, from legal advice to state agencies to defending New Jersey in civil suits to bringing enforcement actions against businesses and individuals who harm residents. It’s a big portfolio. But it’s also a portfolio that hasn’t grown its internal bench to match the workload since 2019, at least not at the pace the outside bills suggest it should have.

Davenport pointed to large, complex cases as another cost driver. That’s true as far as it goes. But Barlas’s underlying question doesn’t go away just because some of the spending has a defensible rationale. If the law division employed 550 attorneys in 2019 and still employs roughly 550 attorneys now, and the work has expanded to the point that outside counsel costs climbed 140%, something in that equation deserves a harder look than a budget hearing can provide.