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University reports final expenses to bring NCAA and related issues to a close

 

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Updated Aug. 13, 2018
Updated Aug. 10, 2018

In response to a public records request, the University is disclosing final costs totaling about $3,642,599 for outside legal representation and public records processing between December 2016 and May 2018. No state-appropriated or tuition dollars were used for these expenses.

The third and final batch of invoices being released show the University paid two law firms $1,935,200 for work on the NCAA case, which ended in October 2017. A third law firm billed $1,660,805 in connection with the final dismissals of all three lawsuits filed by former student-athletes. A temporary agency billed $46,594 to complete review of the final public records batch released in 2017 from the independent investigation conducted by Kenneth Wainstein.

The University must follow state and UNC System policies to retain outside counsel or consultants. Universities facing major challenges often hire outside firms for specific expertise.

(In 2017 and 2015, the University disclosed expenses for outside law firms, temporary agencies reviewing public records, and a public relations agency. Those stories, published here and below, reported $13,191,347 in total expenses between late 2012 and January 2017. In addition, the University previously disclosed the cost of the Wainstein investigation here ($3,111,385.)

Breakout of Expenses in Final Invoices Release

Law Firm (Former Student-Athlete Lawsuits)

  • Skadden, Arps, Slate, Meagher & Flom LLP submitted invoices between May 2016 and May 2018 totaling $1,660,805 for legal services that included securing dismissals in three lawsuits filed by former student-athletes. The firm worked with the N.C. Attorney General’s Office to represent the University.

Skadden Arps was selected by the UNC Board of Governors and UNC-Chapel Hill through a joint process in 2014 with the approval of the offices of the state attorney general and governor.

Law Firms (NCAA Case)

  • Bond Schoeneck & King Attorneys submitted monthly invoices between January 2017 and January 2018 for professional services and consultation totaling $1,237,169. The firm provides services related to the NCAA and other Department of Athletics matters.
  • Sidley Austin, LLP, as outside counsel, submitted invoices totaling $698,031 for professional consultation and representation in the NCAA case between December 2016 and November 2017.

Temporary Agency (Wainstein Public Records Review)

  • Special Counsel billed $46,594 between January 2017 and June 2017 for preparing emails and documents gathered during Wainstein’s investigation for public release. In June 2017, the University released its eighth and final batch of those records in response to two public records requests submitted in 2014. In all, more than 1.828 million pages were posted here on this website. The response was the largest in University history for public records requests.

 

March 24, 2017 update

In conjunction with responses to public records requests, the University is reporting updated cost figures about expenses for outside legal representation and document review related to the past academic irregularities.

The University spent about $5,625,407 for legal representation provided by four law firms and public records document review conducted by two temporary staff agencies. That total is based on invoices covering work between mid-2015 and January 2017. Two law firms are currently working with the University on the pending NCAA case, and a third firm represents the campus in lawsuits filed in federal and state courts by former student-athletes.

No state-appropriated or tuition dollars are being used for these outside law firm expenses, as well as to pay one temporary agency that prepared records from the independent investigation conducted by Kenneth Wainstein for public release. Another temporary agency reviewing Wainstein records was paid with state funds.

(The University previously disclosed expenses or services provided by three law firms and one public relations agency between late 2012 and mid-2015 that were related to the academic irregularities. That story, dated Oct. 26, 2015, is published below. Those total expenses were about $7,565,940.)

Outside Law Firms: Cost Breakouts and Context

  • Skadden, Arps, Slate, Meagher & Flom LLP, as outside counsel, submitted invoices between October 2015 and November 2016 for work performed over 14 months through July 2016. Total billings for work related to the academic irregularities were $2,040,829 (all non-state funds). Currently, Skadden represents the University in two federal court cases (McCants, et. al. v. UNC-Chapel Hill and McAdoo, et. al., v. UNC-Chapel Hill) and one state court case (Arnold, et. al., v. UNC-Chapel Hill).As in 2015, a significant portion of the Skadden firm’s services is not for the academic irregularities; the firm continues to assist with non-athletics pending litigation – Students for Fair Admissions (SFFA), Inc. v. UNC-Chapel Hill – pending in federal court. SFFA challenges the constitutionality of the University’s undergraduate admissions process and filed a similar case against Harvard. Billings totaling $3,210,336 in the newly released invoices were for this admissions case – not the academic irregularities – and are not reflected in the total reported in the second paragraph above.
  • Bond Schoeneck & King Attorneys submitted monthly invoices between August 2015 and December 2016 for professional services and consultation with total billings of $1,332,004 (all non-state funds). The firm currently provides the University with services related to the NCAA and other Department of Athletics matters.
  • Sidley Austin, LLP, as outside counsel, submitted invoices totaling $507,818 (all non-state funds) between January 2016 and August 2016 for professional services and consultation performed over an eight-month period through July 2016. The firm currently provides the University with services related to the NCAA.
  • Cadwalader, Wickersham & Taft, LLP, the firm that conducted the independent review of the academic irregularities in 2014, submitted invoices not previously released between August 2015 and January 2016 for professional services. After billing adjustments, the University paid $158,800 (all non-state funds). See below for additional context about public records processing. The University previously disclosed cost figures for work conducted by Cadwalader including conducting the independent investigation led by Wainstein.

Temporary Agencies: Cost Breakouts and Context (Wainstein Public Records Review)

In response to two public records requests, the University has released over 1.2 million pages of emails and electronic documents gathered during the independent investigation of academic irregularities led by Wainstein. To date, the University has released seven batches of those records between October 2015 and December 2016. These public records requests are the largest in the University’s history.

Carolina previously published 1,129 pages of exhibits and supplementary materials to the Wainstein investigation when that report was released in 2014. Cadwalader, Wickersham & Taft, LLP reviewed those documents and others subsequently released during the first phase of preparing emails and documents gathered for the investigation.

In 2015, the University hired additional document reviewers as a more cost-effective solution to the massive undertaking of reviewing an estimated 5 million pages from a nearly 1.7 million-item database. Before public release, the University is legally mandated to review every page to protect privacy rights and, if necessary, to redact or withhold confidential information.

Costs for two Raleigh-based temporary staffing agencies are as follows:

  • University Temporary Services billed $1,421,824 (state funds) between December 2015 and January 2017 for document review.
  • Special Counsel billed $164,129 (non-state funds) between November 2015 and December 2016 for document review.

 

Originally posted October 26, 2015

The University is publishing cost figures and context for outside legal representation and public relations support provided by four firms over more than two years to help address the past academic irregularities.

The University is posting information on the Carolina Commitment website in conjunction with responding to a public records request from The News & Observer seeking “legal/public relations bills for the UNC scandal.” (http://publicrecords.unc.edu/160046/)

The University estimates spending approximately $7,565,940 to date for services provided by three law firms and one public relations agency that were directly related to the academic irregularities. Bills for three firms reflected work between mid-2014 and mid-2015. One law firm’s invoices dated back to late 2012.

No state-appropriated or tuition dollars are being used for these expenses.

It’s common for major universities facing significant challenges to hire outside firms for subject area expertise. That is a more cost-effective approach to conducting complex work than hiring additional permanent staff and enables an institution to scale up or down the necessary level of staffing and extra resources as needed. UNC-Chapel Hill elected to use this approach when retaining outside legal and public relations support. As a state agency, the University is permitted to retain outside counsel or consultants for legal or other issues and must follow state and UNC policies and procedures.

The University is currently responding to an unprecedented combination of simultaneous issues, including the following:

  • Pending class-action and other lawsuits filed in federal and state courts. Former student-athletes and a former employee initiated cases, and the University also faces a challenge in federal court over how applicants are considered for undergraduate admissions. UNC-Chapel Hill and Harvard were the only two universities named in separate admissions policy lawsuits with U.S. Supreme Court implications.
  • A pending NCAA investigation.
  • A pending review of academic reforms and their effectiveness. The Southern Association of Colleges and Schools Commission on Colleges (SACSCOC), a regional accrediting agency, is conducting this review during the University’s yearlong probationary period.
  • Two pending public records requests – the largest in University history. These requests, submitted by The News & Observer (http://publicrecords.unc.edu/150092/) and The Daily Tar Heel (http://publicrecords.unc.edu/150115/), seek materials from the eight-month, independent investigation led by former federal prosecutor Kenneth Wainstein. His firm, Cadwalader, Wickersham & Taft LLP, compiled a database of nearly 1.7 million unique electronic records totaling about 5 million pages as part of the investigation that resulted in Wainstein’s report. Before public release, the University is legally mandated to review every page to protect privacy rights and, if necessary, to redact or withhold confidential information. (The University released a batch of those records totaling 214,550 pages on Oct. 21, 2015; refer to https://carolinacommitment.unc.edu/updates/university-releases-batch-of-records-gathered-for-wainstein-investigation/.)
  • A sharply rising volume of regular public records requests. The University’s Public Records Office experienced a 32 percent increase in requests during fiscal 2014-15. Requests already had increased by 66 percent over the five-year period since fiscal 2009-10. UNC-Chapel Hill was the first UNC campus to create a full-time public records position. Currently, the equivalent of 9.2 full-time state employees work in this office at a combined personnel cost of nearly $600,000.
  • Pending personnel reviews. The University is conducting personnel reviews of current University employees named in the October 2014 Wainstein report. 
  • Leadership transitions in two key units. In the Office of University Counsel, the vice chancellor and general counsel left to accept a position at another institution. The University hired its first ever vice chancellor for communications and public affairs to create a new office combining previous staff and new additions.

Outside Legal, Public Relations Firms: Cost Breakouts and Context

Following are costs to date and context for the four firms’ work related to “the UNC scandal” as cited in the newspaper’s request:

  • Skadden, Arps, Slate, Meagher & Flom LLP, as outside counsel, submitted invoices between February 2015 and July 2015 for work over a six-month period with total billings of $2,776,479 (all non-state funds). The University estimates $1,926,479 of that total was related to the academic irregularities. A significant portion of Skadden’s services is not for those issues – approximately $850,000 (estimate) during this time period.

As several related legal challenges emerged following the release of the Wainstein report, the University sought one national firm to provide outside counsel and integration. Skadden was selected because its diverse expertise on a national scale was the best fit to assist the Office of the North Carolina Attorney General and the Office of University Counsel. The firm is well-resourced to provide comprehensive advice and counsel on a wide range of related litigation matters, including expected extensive pretrial discovery obligations. Skadden’s engagement was approved by the Office of the Attorney General and the Office of the Governor. The interim vice chancellor and general counsel manages and oversees Skadden’s work, with support from other attorneys and staff in the Office of University Counsel.

Pending litigation involving Skadden related to the academic irregularities includes:

Rashanda McCants, et al., v. NCAA and UNC-Chapel Hill, [federal court]. McCants, a former women’s basketball student-athlete, and her co-plaintiff, former football student-athlete Devon Ramsay, challenge the education and educational opportunities the University provided to them as an NCAA member. This class-action case originated in state court and was moved to federal court. The NCAA and the University have moved to dismiss the case.

Michael McAdoo, et al. v. UNC-Chapel Hill, [federal court]. McAdoo, a former football student-athlete who previously sued the University, and his co-plaintiff, former women’s basketball student-athlete Kenya McBee, challenge the quality of the education they received at UNC-Chapel Hill. The University’s motion to dismiss the class-action complaint is pending.

James Arnold, et al. v. UNC-Chapel Hill, [state court]. Arnold, a former football student-athlete, and his co-plaintiff, former women’s basketball student-athlete Leah Metcalf, challenge the quality of the education they received at UNC-Chapel Hill. The University has moved to dismiss the class-action complaint.

Mary C. Willingham v. The University of North Carolina, et. al, [federal court]. Willingham, a former employee, sought to recover damages and other relief associated with alleged violations of her rights under state personnel law and the First Amendment. With assistance from an outside mediator, both parties agreed to a settlement.

Other matters involving Skadden have included the University’s January 2015 response to a request for information from SACSCOC, the regional accrediting agency, resulting from the release of the 2014 Wainstein investigation. (https://carolinacommitment.unc.edu/updates/unc-chapel-hills-report-responding-to-the-southern-association-of-colleges-and-schools-commission-on-colleges-sacscoc/)

Other significant pending litigation involving Skadden not related to the academic irregularities includes:

Students for Fair Admissions (SFFA), Inc. v. UNC-Chapel Hill, [federal court]. SFFA challenges the constitutionality of the University’s undergraduate admissions process. The same organization filed a similar case against Harvard. As permitted by current law, the University makes admissions decisions applicant by applicant, considering everything known about each student, including race and ethnicity as one factor among many. The court has ordered a partial stay in this case until the U.S. Supreme Court decides a similar case against the University of Texas at Austin.

In addition to advising on the pending litigation listed above, Skadden assists with coordination of the University’s legal strategy across a range of matters approved by the Office of the Attorney General and the Office of the Governor.

  • Cadwalader, Wickersham & Taft, LLP billed $2,673,428 (non-state funds) between December 2014 and June 2015 for professional services performed over a seven-month period that primarily included processing for public release records gathered during the investigation led by Wainstein.
[Note: The University previously disclosed the cost of the Wainstein investigation, $3,111,385 (non-state funds). https://carolinacommitment.unc.edu/faqs/#faq6.]

Following the conclusion of the investigation, the University requested Cadwalader to process for public release the records related to the independent investigation in light of the pending requests from The News & Observer and The Daily Tar Heel. (see bulleted details above). Cadwalader was well positioned to provide public records support since firm staff already were familiar with the nearly 1.7 million-item database they compiled.

Cadwalader prepared 1,129 pages of exhibits and supplementary materials released in conjunction with the Wainstein report on Oct. 22, 2014. (Refer to https://carolinacommitment.unc.edu/reports-resources/press-release/ and https://carolinacommitment.unc.edu/reports-resources/supplements/).

  • Bond Schoeneck & King Attorneys billed $1,270,377 (non-state funds) between December 2012 and July 2015 for professional services and consultation dating back to November 2012.

Bond Schoeneck & King currently provides the University with services related to the NCAA and other Department of Athletics matters.

  • Daniel J. Edelman Inc. billed $1,695,656 (non-state funds) for strategic public relations advice and services provided over seven months, between June 2014 and December 2014, that included, but were not limited to, academic irregularities and related issues.

Edelman began providing consulting services to the University five months after the arrival of the first vice chancellor for communications and public affairs. The agency helped staff the University’s communications office – which historically had been severely under-resourced compared with peer campuses – and supported the management of media relations, content creation (digital, social media and websites), strategic services (such as video production), internal communications, and other related areas.

Edelman worked on a retainer basis and on specific projects such as helping prepare for the public release of the Wainstein report. The agency provided strategic advice and brought in staff members to regularly work alongside the University’s communications team in Chapel Hill and facilitate direct access to additional Edelman resources. The dollar figure cited above conservatively includes work from November and December 2014 related to some follow up after the release of the Wainstein investigation report.

Besides the new vice chancellor, who started in December 2013, the only other senior leadership addition in the run-up to the investigation report release was a new associate vice chancellor responsible for helping manage day-to-day operations. While this office did begin gradually hiring some additional staff in fall 2014, no other senior directors started until that December. A new media relations director began in March 2015.

Since January 2015, Edelman has primarily provided strategic support on other issues and topics as the Office of Communications and Public Affairs added staff. The agency currently provides limited services at a greatly reduced level.

Note: See below for a representative list of North Carolina law and communications firms with which the University, the UNC-Chapel Hill Foundation Inc. and UNC Health Care have recently worked.

Academic Reform Context

The University has implemented more than 70 reforms and initiatives since 2011 – when the irregularities ended – to provide greater administrative oversight and additional support for students. The University continues to monitor the effectiveness of those measures and, wherever needed, put additional safeguards in place.

Since the release of the Wainstein report, the University has launched several additional reform initiatives, including the following:

    • Advising and Academic Support Programs: The University’s focus is on aligning and advancing existing advising and support programs for student-athletes, further integrating the delivery of academic and career advising to include intensive and early attention to major exploration and post-college opportunities. The University is evaluating and monitoring academic support processes to determine adherence to policies and protect academic integrity. That process has included reviewing advising and counseling as part of the Student-Athlete Academic Initiative Working Group’s efforts to document all academic processes for student-athletes.
    • Ethics and Integrity Working Group: Chancellor Folt charged a working group in May to recommend how best to oversee a commitment to integrity and compliance with all applicable laws, regulations and policies. The chancellor wants to make sure that every member of the community who has any concerns has a clear avenue for expressing them and that there are confidential channels to share any concerns about compliance or ethical issues.
    • Policy and Procedures Working Group: Chancellor Folt charged another working group in May to identify any redundancies, gaps, and inconsistencies; make recommendations for policy and procedure improvements; and create a mechanism for periodic re-evaluation.

Both new groups are making progress with their charges.

For details about other reforms, initiatives and progress, see https://carolinacommitment.unc.edu/updates/.

A Sampling of North Carolina Law and Communications Firms

UNC-Chapel Hill, the UNC-Chapel Hill Foundation Inc. and the UNC Health Care System regularly work with outside law and communications firms. A representative sampling follows below.

For recent legal services or work in subject areas including intellectual property, bankruptcy, environmental issues and professional liability matters (Office of University Counsel, Office of Technology Development and UNC Health Care System):

  • Alston & Bird, Raleigh, N.C.
  • Jenkins, Wilson, Taylor & Hunt, P.A., Durham, N.C.
  • Leak & Schroeder PLLC, Winston-Salem, N.C.
  • Moore & Van Allen PLLC, Morrisville, N.C.
  • Myers Bigel Sibley & Sajovec, P.A., Raleigh, N.C.
  • Nifong Kiefer & Klinck PLLC, Raleigh, N.C.
  • Olive Law Group, Durham, N.C.
  • Passé Intellectual Property, LLC, Raleigh, N.C.
  • The Eclipse Group, Durham, N.C.
  • Withrow and Terranova, PLLC, Cary, N.C.
  • Womble Carlyle Sandridge & Rice, PLLC, Research Triangle Park, N.C.
  • Cranfill, Sumner & Hartzog LLP, Raleigh, N.C.
  • Yates, McLamb & Weyher, LLP, Raleigh, N.C.

For the UNC-Chapel Hill Foundation Inc.

  • Schell Bray PLLC, Greensboro, N.C. (principal legal representation)
  • Robinson Bradshaw & Hinson, P.A., Charlotte and Research Triangle Park, N.C.

For recent public relations, advertising, marketing, video production or other related work (UNC-Chapel Hill and UNC Health Care):

  • Capstrat Inc., Raleigh, N.C. (Office of Communications and Public Affairs, Kenan-Flagler Business School, Office of Undergraduate Admissions, as well as the UNC Health Care System)
  • Clean Design Inc., Raleigh, N.C. (including Kenan-Flagler Business School, Friday Center)
  • MSA Marketing, Raleigh, N.C. (UNC Health Care System)
  • Horizon Video Productions Inc., Durham, N.C. (multiple UNC-affiliated units)
  • StoryDriven Media Group, Durham, N.C. (Office of Research Communications and UNC Health Care System)
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