New Jersey’s Outside Legal Bills Top $53 Million as Firm Secures Record $2 Billion Environmental Settlement
Why It Matters
New Jersey taxpayers are footing a rapidly growing bill for outside legal counsel, with state government spending on private attorneys more than doubling over six years. The surge in legal costs raises fresh questions about government efficiency and the expanding reliance on high-priced outside firms — even as the state’s in-house legal department charges agencies an additional $145 million annually.
What Happened
New Jersey state government paid private law firms more than $53 million in attorney fees in 2025, according to an analysis by the nonpartisan Office of Legislative Services. That figure represents more than double what the state paid six years ago and accounts for roughly 25% of the state’s total legal spending, which also includes in-house Department of Law and Public Safety services.
Attorney General Jennifer Davenport recently addressed the Assembly Budget Committee, explaining that outside counsel is engaged when the state faces conflicts of interest, specialized legal matters, insufficient internal capacity, or large-scale litigation. “There may be a conflict, a specialized area of law or if there’s insufficient capacity (in the department) or something maybe that’s large-scale,” Davenport said, in remarks reported by NJ Spotlight News.
The largest single outside expenditure — approximately $14.8 million — went to New York-based Kelley Drye & Warren LLP for environmental litigation against DuPont and related companies over hazardous waste contamination. That legal effort produced a settlement of more than $2 billion, which the Attorney General’s Office described as a national record for an environmental legal agreement with a single state.
By the Numbers
$53 million+ — Total paid to private law firms in 2025, more than double the amount from six years prior.
57% — The increase in outside counsel spending over just the past two years, driven in part by hourly rate increases of $50 per hour approved by the state. Law associates now earn $250 per hour and partners $300 per hour under state contracts.
114 firms handled approximately 1,700 legal matters, with the top 10 highest-earning firms collecting two-thirds of all fees paid. Nine firms individually received more than $1 million.
$8.4 million was spent on a review of New Jersey’s COVID-19 response, resulting in a 910-page report by Philadelphia-based Montgomery McCracken Walker & Rhoads.
$1.1 million was paid to Atlanta-based King & Spalding in an effort to block New York City’s congestion pricing program.
Record Settlement and Other Notable Cases
The landmark $2 billion environmental settlement centered on per- and polyfluoroalkyl substances — known as PFAS or “forever chemicals” — at four contaminated sites across the state. The agreement includes $875 million earmarked for natural resources damages and abatement projects, including drinking water treatment infrastructure.
Other notable legal expenditures include $564,000 paid to Roseland-based Connell Foley LLP to handle an ongoing federal discrimination lawsuit filed by Blueprint Capital Advisors LLC, a Black-owned investment firm alleging the state wrongfully awarded a contract and shared confidential information with BlackRock Inc., the world’s largest asset manager. The state also settled a whistleblower lawsuit brought by former Assistant Health Commissioner Chris Neuwirth — who alleged he was fired for reporting unethical conduct during the COVID-19 pandemic — for $2.25 million.
Zoom Out
New Jersey’s ballooning legal costs reflect a broader national trend of state governments increasingly outsourcing complex litigation to private firms. States across the country have faced mounting legal challenges in areas ranging from environmental liability and civil rights to pandemic-era policy disputes — all of which drive demand for specialized outside counsel. Federal subsidy reductions affecting discount health plans have similarly added fiscal pressure on state budgets, leaving lawmakers to scrutinize every line item more closely.
Under rules implemented in 2009, New Jersey requires outside counsel to pass conflict-of-interest checks and other vetting before being retained. In rare cases, the governor may authorize firms without pre-approval when highly specialized expertise is needed.
What’s Next
The Assembly Budget Committee is expected to continue reviewing outside counsel expenditures as part of the broader state budget process. Lawmakers will likely weigh whether the $53 million in private attorney fees — and the steady rate increases embedded in state contracts — represent an appropriate use of taxpayer funds or signal the need for expanded in-house legal capacity. Oversight of the $2 billion PFAS settlement’s implementation, including the distribution of cleanup and drinking water funds, will also be closely monitored in the months ahead. For more on ongoing New Jersey policy developments, see coverage of literacy screening results in state schools.