(a) Any contract for legal services shall contain the following provisions:

(1) The contractor shall agree to adhere to legal cost and billing guidelines designated by the state agency.

(2) The contractor shall adhere to litigation plans designated by the state agency.

(3) The contractor shall adhere to case phasing of activities designated by the state agency.

(4) The contractor shall submit and adhere to legal budgets as designated by the state agency.

(5) The contractor shall maintain legal malpractice insurance in an amount not less than the amount designated by the state agency.

(6) The contractor shall submit to legal bill audits and law firm audits if requested by the state agency. The audits may be conducted by employees or designees of the state agency or by any legal cost control providers retained by the state agency for that purpose.

(b) A contractor may be required to submit to a legal cost and utilization review, as determined by the state agency.

(c) As used in this section, the following definitions apply:

(1) “Legal bill audits,” means an evaluation and analysis of the reasonableness of particular legal bills submitted to a state agency for reimbursement.

(2) “Law firm audit,” means a review of law firm files applicable to legal services provided to a state agency for a particular time period.

(3) “Legal cost and utilization review,” means a review performed by the state agency or its legal cost provider of the utilization and billing practices of a contractor for the purpose of developing or revising guidelines to be followed prospectively by the contractor in representing the state agency.

(4) “Contract for legal service,” shall include any contract between a state agency and any law firm, professional corporation, law firm partnership, or individual attorney to perform legal work on behalf of the state agency.

(5) “Legal cost control provider,” means any corporation, professional corporation, partnership, or sole proprietorship which possesses the following qualifications:

(A) Maintains an office in the state.

(B)Is authorized to do business in the state.

(C) Has existed as a legal cost control provider for at least two complete, successive years, as evidenced by filings of tax returns.

(D) All legal cost control services are provided by attorneys.

(E) All attorneys providing the legal cost control services are admitted to practice in this state.

(F) All attorneys have been admitted to practice in this state for a minimum of five years prior to the performance of any legal cost control services for any state agency.

(G) Any legal cost control provider shall maintain professional liability insurance in the amount designated by the state agency.

(Added by Stats. 1992, Ch. 734, Sec. 1. Effective January 1, 1993.)