Raleigh

Would you pay a gardener to fix your car's brakes? Would you go to a hardware store to buy a gallon of milk?

Some North Carolina law firms apparently believe there's nothing wrong with such nonsense. In fact, they're encouraging state officials to do exactly that - buy services from them despite an obvious lack of expertise.

The law firms hope to get a piece of the action as State Treasurer Janet Cowell and Attorney General Roy Cooper begin looking to hire outside legal help in case the state's $60 billion pension fund decides to sue any wayward companies for securities fraud.

Over the past decade, these securities fraud lawsuits have become big business as charges of stock manipulation and overstated earnings by companies like Enron, WorldCom and Tyco have made headlines worldwide.

Federal law gives public pension funds, as huge institutional investors and leading investors in individual companies, an advantage in becoming a lead plaintiff in these lawsuits. As a lead plaintiff, pension funds are likely to receive the largest court awards.

It makes perfect sense that Cowell and Cooper are cooperating to establish a list of law firms to use should the state ever decide to pursue such a lawsuit.

Cowell's predecessor, Richard Moore, fought with Cooper over the same issue, a turf war that spilled over into a federal court case, with lawyers from the two state agencies filing opposing legal briefs. Cowell and Cooper apparently want to avoid a repeat of the embarrassment.

But in other states, the hiring of outside securities litigation firms has been accompanied by allegations of influence-peddling and pay-to-play politics.

Now, back to that buying milk with your hammer and nails.

So far, 45 law firms have applied to be considered by a selection committee to be set up by Cooper and Cowell.

Most of the firms are not from North Carolina. Their main offices are in places like New York, Philadelphia and Boston. And most have vast experience in securities fraud litigation. A few have won court cases that you've read or heard about.

So why would anyone hire a Raleigh law firm that has never handled one of these cases and has no securities -litigation specialists in its shop over a nationally known firm that has successfully sued WorldCom?

The local law firms would probably answer by talking about their local knowledge and understanding of local issues. It's worth noting, though, that these cases would be brought in -federal court, not state courts.

The notion that these local firms, which want to piggy-back with the national firms to get a cut of the -lucrative business, could somehow help these securities specialists seems a stretch.

Then again, maybe what they are really selling is the ability - or at least, the perception of the ability - to actually line up the business for these national firms.

In other words, you want to buy milk? You gotta buy nails from me first.

Scott Mooneyham writes for Capitol Press Association in Raleigh. Contact him at smooneyh@ncinsider.com.